Why Homeowners Policies Are Non-Renewed
There could be many reasons behind your insurance non-renewal. Be sure to understand exactly why your home insurance was denied so that you can proceed accordingly.
One key reason is that the insurance carrier isn’t offering that coverage any longer. They may have decided to drop that line of insurance, or they may not be offering policies in your state or region anymore in the name of making higher profits. Many policyholders are non-renewed for this reason, and it doesn’t mean you did anything wrong. You may even be able to find a policy with a competitor that costs the same or less. Getting non-renewed doesn’t always mean higher premiums.
It’s also possible that you filed too many insurance claims. Your claims history is one of the most common reasons for insurers to drop people from their policies. You may have filed too many claims—even small claims —within a certain window of time, or you may have filed too many claims in a certain category, like fire, water damage, or dog bites.
The insurance company may also non-renew your policy if your risk has changed significantly. In other words, your home is more likely to be damaged by a covered peril than it was when you got the policy. This might mean that a home inspection has revealed unacceptable risks, or you’ve made changes to your home that violate the terms of the policy. You may have simply added a home-based business, which requires different insurance. This type of non-renewal is also often used in areas at high risk for wildfires or hurricanes.
Non-Renewal and Consumer Protection
Most states have consumer protections in place that say when a company is allowed to raise your premiums or non-renew your policy for claim-related reasons. For example, some states bar insurance companies from raising your rates after your first claim or any claims that didn’t require a payout (also known as zero-dollar claims).
Some states also don’t let companies use weather or natural disasters as a reason to non-renew. Contact your state’s insurance department to learn more about state-specific consumer protection and other insurance information.