Insurance Dropped: Your Action Plan

It can be stressful to find out that your home insurance policy has been dropped, but there are a few things you can do to address the situation. Firstly, contact your insurance provider or agent to inquire about the reason for the cancellation and see if there is a possibility of rectifying it. For instance, if the issue is non-payment, you may be able to set up a payment plan to catch up on what you owe. If you can't amend the situation and your policy is scheduled to be cancelled, you should start shopping for a new policy as soon as possible to avoid a lapse in coverage. You may also need to consider a non-standard policy or a Fair Access to Insurance Requirements (FAIR) plan, which is a state-run program that provides insurance for high-risk consumers. Improving the condition of your home and reducing your risk profile can also help you get reinstated with your previous insurer or find a new one.

Contact your insurance company

If your home insurance policy is cancelled or dropped, you should contact your insurance company to discuss the issue and understand the reason for the cancellation or non-renewal. Sometimes, insurance companies may cancel a policy due to an administrative error, and you may be able to resolve the issue by providing additional information. In other cases, you may be able to correct the issues that led to the cancellation and request a reevaluation from the insurance company. For example, if your policy is being cancelled due to non-payment, see if you can set up a payment plan with your insurer and catch up on what you owe. If the cancellation was due to disrepair or safety concerns, you may be able to make the necessary repairs and get your policy reinstated.

Your insurance company is required by law to provide you with adequate notice of non-renewal or cancellation, allowing you time to find alternative coverage. If you disagree with the reason for the cancellation, you can consider filing a complaint with your state's insurance regulator. You can also contact your state's insurance department if you think you're being treated unfairly or illegally by your insurance company, or if you need help finding new coverage for your home.

If you cannot get your policy reinstated, you should start shopping for a new insurance policy as soon as possible to avoid a lapse in coverage. A lapse in coverage will make your premium even more expensive, and you may struggle to get another home insurance policy in the future.

Shop for a new policy

If your home insurance policy has been dropped, it's important to act quickly to find a new policy. Here are some detailed and instructive steps to help you shop for a new home insurance policy:

• Start shopping early: As soon as you receive notice that your current policy will be cancelled or not renewed, begin shopping for a new home insurance policy. It is crucial to secure a new policy before your current one ends to avoid a lapse in coverage, which can make your premium even more expensive.
• Compare quotes from multiple insurers: Get quotes from several different insurance providers to find the most affordable policy that suits your needs. You can get quotes online, in person, or by calling an agent. Comparing quotes will help you find the best deal on the right policy for your specific situation.
• Understand your coverage needs: Calculate how much coverage you need by considering the replacement cost of your home, the total value of your personal belongings, and the total value of all your assets. This will ensure that you have adequate coverage to repair or rebuild your home and replace your belongings in the event of a disaster.
• Get familiar with home insurance policy lingo: Familiarize yourself with the different types of coverages included in a standard homeowners insurance policy. This will help you understand how you are protected by each type of coverage when comparing policies.
• Gather information about your home: To get an accurate quote, you will need to provide detailed information about your home, such as the square footage, roof type, heating type, renovation history, the presence of pets or a pool, and whether it is your primary or secondary home. The more details you provide, the more precise your quote will be.
• Consider your location and risk factors: The location of your home and the associated risks, such as wildfires, hurricanes, or tornadoes, will impact your coverage needs. If you live in a high-risk area, you may want to consider insurance carriers that offer extended or guaranteed home rebuild coverage.
• Improve your risk profile: Determine why your previous policy was dropped and take steps to address the issue. For example, if your policy was cancelled due to non-payment, set up a payment plan with your new insurer. If it was due to risk-related issues, consider making improvements to reduce your risk, such as installing stormproof windows or a metal roof if you live in a high-risk hurricane area.
• Look into state FAIR plans: If you have been labelled high-risk and are struggling to find insurance, many states offer Fair Access to Insurance Requirements (FAIR) plans. These plans provide insurance to individuals who cannot get coverage in the voluntary market and can serve as a stepping stone to conventional coverage in the future. However, FAIR plans often come with higher costs and less coverage.

Reduce your risk

If your home insurance policy was dropped due to risk-related issues, there are several actions you can take to reduce your risk profile and address the insurer's concerns. Here are some steps you can take:

• Improve the condition of your home: If your policy was dropped due to the condition of your home, such as a poorly maintained roof or structural issues, consider making the necessary repairs or upgrades. By addressing these issues, you may be able to get your policy reinstated or, at the very least, improve your chances of obtaining coverage from a new insurer.
• Reduce risks associated with your location: If you live in an area prone to natural disasters or other types of damage, consider implementing measures to mitigate these risks. For example, if you live in a high-risk hurricane zone, you can install storm shutters and hurricane-proof windows or replace your current roof with a metal one. These improvements may help convince insurers that your home is less vulnerable to damage.
• Avoid frequent claims: Filing too many claims within a short period can cause your insurance premium to increase, and insurers may view you as a higher risk. Avoid filing small claims that are only slightly above the deductible amount. Instead, save your insurance for major losses or emergencies.
• Maintain your property: Keep your property well-maintained and address any issues promptly. This includes making necessary repairs, performing regular maintenance, and ensuring your property is secure. A well-maintained property is less likely to be dropped by insurers.
• Improve your insurance credit score: A low insurance credit score can be a reason for insurers to drop your policy or not renew it. To improve your score, focus on maintaining a good credit history by making timely payments and avoiding late or missed payments.
• Address underwriting issues: If an adjuster visits your home after a claim and notices that your home does not meet the insurer's underwriting guidelines, your policy may be at risk of cancellation. Work with your insurer to understand their specific guidelines and make any necessary changes to bring your home into compliance.
• Review your policy annually: Stay updated on your coverage by reviewing your policy annually. This will help you identify any areas of concern and make any necessary adjustments to reduce your risk.

Improve the condition of your home

Improving the condition of your home can help you get a new insurance policy after being dropped by your previous insurer. Here are some ways to improve the condition of your home:

Repaint your home

One of the cheapest and easiest ways to improve the condition of your home is to repaint it. Painting the interior of your home can help eliminate dirt, marks, or stains from your walls, giving it a fresh feel and appearance. Repainting the exterior of your home can also help improve its value. If you just want to repaint a door or a single room, doing it yourself could cost you between $200 and $300. For bigger jobs, consider hiring a professional painter.

Improve your curb appeal

Improving your curb appeal can make a big difference in your home's value. Upgrading your landscape can go a long way. Some ideas include adding a fresh walkway, shrubs, planters, mulching, or even a new patio or outdoor kitchen. You can also improve your curb appeal by upgrading your exterior doors, such as installing a modern glass panel door or a rustic wood door.

Improve your home's energy efficiency

Projects that lower utility bills can increase the value of your home. Installing a smart thermostat, for example, can help improve efficiency and save money. Other ways to improve your home's efficiency include replacing old, leaky windows, installing energy-efficient appliances, and adding insulation.

Upgrade your kitchen

Many buyers focus on the kitchen as the central feature of a home. If your kitchen is outdated or doesn't meet your needs, consider upgrading it. This could involve replacing old appliances, installing modern hardware on your cabinets, or even a full remodel. Keep in mind that a full kitchen remodel can be expensive and may not recoup its full cost.

Improve your flooring

Brand new flooring can be expensive, but there are ways to refresh your existing floors. If you have wall-to-wall carpeting, consider shampooing it. Instead of installing new wood or tile floors, consider refinishing or reglazing your existing floors, which can be more cost-effective.

Contact your state's insurance department

If you believe you are being treated unfairly or illegally by your insurance company, you should contact your state's insurance department. They can also help if you can't find new coverage for your home.

Each state has its own department of insurance, so you will need to find the contact information for your specific state. This information can usually be found on the website of your state's department of insurance.

Your state's insurance department can help you understand your rights and options if you believe your insurance has been wrongfully cancelled. They can also provide information about the Fair Access to Insurance Requirements (FAIR) plan in your state. FAIR plans are state-managed programs that provide insurance for individuals who cannot get coverage in the voluntary market. These plans typically have more flexible eligibility requirements and can be a good option if you are having trouble finding coverage through a standard insurance policy.

It is important to act quickly if your insurance policy has been cancelled or is about to be cancelled. You will need to find new coverage to avoid a lapse in coverage, as this can make it more difficult and expensive to obtain insurance in the future.

Frequently asked questions