Homeowners Insurance Cancellation
Homeowners insurance cancellation can occur because you decide you want to terminate your policy or because your insurer has decided to cancel your policy. You could decide to order the cancellation because you are moving or for a number of other reasons. However, having homeowners liability coverage to protect you and your home is essential, so if you haven’t planned to cancel your policy and it is canceled by your insurer, then you could be in a very bad position. Due to cancellation, your home could be left unprotected and you could suffer great financial losses.
It’s important to understand the difference between homeowners insurance cancellation and non-renewal. Your homeowners insurance provider can make the decision not to renew your policy if you meet certain conditions. Usually, your provider can deny you renewal if you have filed three or more claims in the past three years, not related to weather damage. All companies may have different conditions for non-renewal, so it’s important for you to check these clauses in your policy contracts. If your homeowners insurance provider makes the decision not to renew your policy, then they are required to give you a notice of at least 30 days prior to the policy’s expiration date. If this advance notice is not met, then the provider must renew your policy if you request it.
Homeowners insurance cancellation, on the other hand, can occur at any time prior to the expiration date of your policy or its renewal date. If your policy is canceled by your coverage provider, then any unearned premium on your account must be returned to you. An unearned premium is a prorated amount that you have already paid in towards your yearly premium. There are a number of reasons that you insurer may decide to cancel your policy and they include: an undisclosed risk of loss, insurance fraud, a recently increased risk, or a failure to pay premiums on time. Generally, all of these reasons for cancellation require your insurer to provide you with a 30 day notice. It is important to remember that as a homeowner, you have rights when it comes to homeowners coverage. If your policy has been cancelled, then you have a right to ask for the reasons in writing, and you are allowed to respond to these reasons in writing.
Ways to Avoid
There are a number of different ways that you can avoid homeowners insurance cancellation. First, you can avoid homeowners insurance cancellation by fully disclosing all risks when you apply for your policy. If you are not honest when you make your application for an insurance policy, then the company will have every right to cancel your policy upon discovering the risks you did not disclose. The best thing to do when you are looking for a homeowners policy is to disclose everything up front. That way you can get the best quotes and protect yourself from perils such as fire and flood, and you won’t be risking the prospect of cancellation.
Another way for you to ensure that you will not suffer from homeowners insurance cancellation is to pick one company and stick with it for all of your insurance needs. If you can, make the effort to bundle your automobile, life and any other insurance coverage into one policy. If you have multiple policies with a company, then you are likely to be valued more highly and considered a long-term, reliable customer. In fact, for making this choice you may even get a discount on your premiums instead of facing homeowners insurance cancellation.
You can also avoid homeowners insurance cancellation by paying your premium bills on time. Providers need to be paid for the services that they provide you, so that they will have the money to fulfill the claims made by other homeowners. If they do not receive the money that you owe them each month, then you can expect cancellation of your policy. If your premiums for hazard protection are too much, you may be able to lower your coverage options or drop certain endorsements altogether. That way, you can make your current policy something that you can afford and you won’t face cancellation. If you are having trouble making your regular payment amounts, don’t just ignore them and go on with your life. Instead, contact the company and inform them of your situation. You may be able to work out something with them rather than losing your policy over non-payment.
Homeowners insurance cancellation is a serious issue, and you should make every effort to avoid this. If one company cancels your policy, then you may have trouble securing coverage in the future. It’s best to try and be a responsible, reliable customer that any provider can count on to make timely payments.