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With the increasing frequency of events like hurricanes, wildfires, floods and other natural disasters, it’s becoming more common for home insurance companies to opt not to renew home insurance policies or simply to drop policyholders altogether. Data shows that in areas with a high risk of severe weather, like California, more than 200,000 policies were nonrenewed in 2020 according to the California Department of Insurance. Being dropped can also happen if you’ve filed multiple insurance claims in recent years.
Losing your home insurance can be stressful and puts you at risk of financial loss should anything happen to the home. In addition, mortgage companies often require that you have home insurance. If you’re dealing with canceled insurance, Bankrate’s insurance editorial team helps you explore your options.
Reasons a home insurance company will cancel or not renew your policy
There are many different reasons why a home insurance company may choose to cancel or nonrenew a policy. Some of the most common causes include:
- Non-payment: Your insurance policy is a legal contract between you and your insurer. In exchange for a premium, your insurer agrees to compensate you for covered losses. If you stop paying your premium, your insurance company will eventually cancel your home insurance policy for non-payment.
- Frequent claims: Can an insurance company drop you after a claim? In some cases, yes. Filing home insurance claims often could cause your home insurance premium to increase and if you’ve filed multiple claims within the past few years, it’s possible that your home insurance company might cancel your policy altogether. Homeowners with a lengthy claim record are generally viewed as riskier to insure.
- Insurance fraud: Insurance fraud is illegal, and it has serious consequences. So, if you intentionally set your house on fire and try to collect an insurance payment, your insurance policy will most likely get canceled, along with other potential fallout.
- Underwriting issues: Certain underwriting issues can also lead to dropped insurance. For instance, if an adjuster visits your home after a claim and notices that your home does not meet the insurer’s underwriting guidelines, it’s possible that your policy will get canceled.
- Nonrenewal: In some cases, insurance carriers decide not to renew a homeowners insurance policy. This can happen if you live in an area that’s been designated as too high risk or you no longer fit the company’s underwriting profile. It can also occur if your home is not well maintained or as a result of your claims history.
In addition to the reasons listed above, it’s also common for home insurance companies to refuse a renewal if they are withdrawing business from your area. In such cases, you will have until the end of the policy period to find new coverage.
What should you do if your homeowners coverage is dropped
It can be stressful to find out that your home insurance policy is getting canceled, but there are a few things you can do to address the situation.
The first step to take is to reach out to your insurance provider or your agent. Inquire about the reason for the cancellation and see if there is anything you can do to fix it. For example, if your policy is being canceled due to non-payment, see if you can set up a payment plan with your insurer and catch up on what you owe.
If you can’t amend the situation and your policy is scheduled to be canceled, here’s how to get homeowners insurance after being dropped:
- Shop for a new policy: Start shopping for a new home insurance policy as soon as possible. Get quotes from a few different insurers to find the most affordable policy for your situation.
- Reduce your risk: If your policy was canceled due to risk-related issues, see if you can address them. For instance, if your home is in a high-risk hurricane area, consider installing stormproof windows and hurricane shutters, or replace your current roof with a metal one.
- Look into a non-standard policy: Some homeowners have a harder time getting approved for coverage due to factors that are out of their control. In this case, you might want to consider non-standard policies, which often have more flexible eligibility requirements.
- Improve the condition of your home: In some cases, the policy may be dropped because of the conditions of your home. This could include the roof being in poor condition or perhaps other structural issues. In such cases, you may be able to address the issue that caused the policy to be canceled and get it reinstated. If you’re unable to reinstate your policy, the improved conditions of your home should help reduce your chance of being denied by a new insurer.
Home insurance cancellation laws by state
In many states, insurance companies must provide some type of notice prior to moving forward with a policy cancellation. However, every state has unique laws around home insurance cancellation and nonrenewal. For example, in California, insurance companies are required to give policyholders a notice of cancellation at least 45 days before the policy’s termination date.
If you have questions about the home insurance cancelation laws in your state, you can notify your state’s department of insurance using the contact information below:
State Department of Insurance Contact Information Alabama Department of Insurance201 Monroe Street, Suite 1700, PO Box 303351Montgomery, AL 36104Phone: (334) 269-3550Fax: (334) 241-4192http://www.aldoi.org Alaska Department of Community and Economic Development3601 C Street, Suite 1324Anchorage, AK 99503Phone: (907) 269-7900Fax: (907) 269-7910http://www.dced.state.ak.us/insurance Alaska Department of Community and Economic DevelopmentP.O. Box 110805Juneau, AK 99811Phone: (907) 465-2515Fax: (907) 465-3422http://www.commerce.state.ak.us Arizona Arizona Department of Insurance2910 N. 44th Street, Ste. 210 (2nd Floor)Phoenix, AZ 85018-7269Phone: (602) 364-3100Fax: (602) 954-7008http://www.azinsurance.gov/ Arkansas Department of Insurance1200 West 3rd StreetLittle Rock, AR 72201Phone: (501) 371-2640Fax: (501) 371-2749http://www.state.ar.us/insurance California Department of Insurance300 Capitol Mall, Suite 1500Sacramento, CA 95814Phone: (916) 492-3500Fax: (415) 538-4010http://www.insurance.ca.gov Colorado Division of Insurance1560 Broadway, Suite 850Denver, CO 80202Phone: (303) 894-7499, ext. 4311Fax: (303) 894-7455http://www.dora.state.co.us/Insurance Connecticut Department of InsuranceP.O. Box 816Hartford, CT 06142Phone: (860) 297-3984http://www.state.ct.us/cid Delaware Department of Insurance841 Silver Lake Blvd., Rodney BuildingDover, DE 19904Phone: (302) 739-4251Fax: (302) 739-5280http://www.state.de.us/inscom Washington D.C. Department of Insurance, Securities and Banking810 First Street, NE, Suite 701Washington, DC 20002Phone: (202) 727-8000Fax: (202) 535-1196http://disb.dc.gov/ Florida Office of Insurance Regulation200 East Gaines StreetTallahassee, FL 32399Phone: (850) 413-3140http://www.floir.com/ Georgia Insurance and Fire SafetyTwo Martin Luther King, Jr. DriveAtlanta, GA 30334Phone: (404) 656-2070Fax: (404) 651-8719http://www.inscomm.state.ga.us Hawaii Department of Commerce and Consumer Affairs,Insurance DivisionKing Kalakaua Building: 335 Merchant StreetP.O. Box 3614Honolulu, HI 96813Phone: (808) 586-2790Fax: (808) 586-2806http://hawaii.gov/dcca/ins Idaho Idaho Department of Insurance700 West State Street, P.O. Box 83720Boise, ID 83720-0043Phone: (208) 334-4250Fax: (208) 334-4398http://www.doi.idaho.gov Illinois Illinois Department of Insurance320 West Washington StreetSpringfield, IL 62767Phone: (217) 782-4515http://insurance.illinois.gov/ Indiana Department of Insurance311 W. Washington St., Ste 300Indianapolis, IN 46204Phone: (317) 232-2385Fax: (317) 232-5251http://www.state.in.us/idoi/ Iowa Division of Insurance330 Maple StreetDes Moines, IA 50319Phone: (515) 281-5705Fax: (515) 281-3059http://www.state.ia.us/government/com/ins/ins.htm Kansas Insurance Division420 SW 9th StreetTopeka, KS 66612Phone: (785) 296-7801Fax: (785) 296-2283http://www.ink.org/public/kid Kentucky Kentucky Department of Insurance215 West Main StreetFrankfort, KY 40601Phone: (502) 564-3630Fax: (502) 564-1650http://insurance.ky.gov/ Louisiana Department of Insurance950 North Fifth StreetBaton Rouge, LA 70804Phone: (225) 343-4834Fax: (254) 342-5900http://www.ldi.state.la.us Maine Bureau of Insurance34 State House StationAugusta, ME 04333Phone: (207) 624-8475Fax: (207) 624-8599http://www.maineinsurancereg.org Maryland Maryland Insurance Administration200 St. Paul Place, Suite 2700Baltimore, MD 21202Phone: (410) 468-2000Fax: (410) 468-2020http://www.mdinsurance.state.md.us Massachusetts Division of InsuranceSouth Station, 5th FloorBoston, MA 02110Phone: (617) 521-7794Fax: (617) 521-7772http://www.state.ma.us/doi Michigan Michigan Department of Insurance and Financial Services611 West Ottawa Street, 3rd FloorP.O. Box 30220Lansing, MI 48909-7720Phone: (517) 373-0220Fax: (517) 335-4978http://www.michigan.gov/difs Minnesota Department of Commerce133 East 7th StreetSt. Paul, MN 55101Phone: (651) 296-2488Fax: (651) 296-4328http://www.commerce.state.mn.us Mississippi Department of InsuranceP.O. Box 79Jackson, MS 39205Phone: (601) 359-3569Fax: (601) 359-2474http://www.doi.state.ms.us Missouri Missouri Department of Insurance301 West High Street, Room 630PO Box 690Jefferson City, MO 65102Phone: 573-751-4126Fax: (573) 751-1165http://insurance.mo.gov/ Montana Montana Insurance Department840 Helena AvenueP.O. Box 4009Helena, MT 59601Phone: (406) 444-2040Fax (406) 444-2701http://www.csi.mt.gov/industry/insurance.asp Nebraska Nebraska Department of Insurance941 O St.PO Box 82089Lincoln, NE 68501-2089Phone: (402) 471-2201Fax: (402) 471-4610http://www.doi.nebraska.gov/ Nevada Division of Insurance1665 Hot Springs Road, #152Carson City, NV 89706Phone: (775) 687-7690Fax: (775) 687-3937http://www.doi.state.nv.us New Hampshire Department of Insurance56 Old Suncook RoadConcord, NH 03301Phone: (603) 271-2261Fax: (603) 271-1406http://www.state.nh.us/insurance New Jersey New Jersey Department of Banking and Insurance20 West State StreetPO Box 325Trenton, NJ 08625Phone: (609) 292-7272Fax: (609) 777-0508http://www.state.nj.us/dobi New Mexico Department of InsuranceP.O. Box 1269Santa Fe, NM 87504Phone: (505) 827-4601Fax: (505) 827-4734http://www.nmprc.state.nm.us New York New York State Department of Financial Services25 Beaver StreetNew York, NY 10004Attn: Insurance DepartmentPhone: (212) 480-6400http://www.dfs.ny.gov/insurance/dfs_insurance.htm North Carolina North Carolina Department of InsuranceDobbs Building: 430 N. Salisbury StreetRaleigh, NC 27603-5926Phone: (919) 807-6750Fax: (919) 733-6495http://www.ncdoi.com North Dakota North Dakota Insurance Department600 East Blvd. Avenue, 5th FloorBismarck, ND 58505Phone: (701) 328-2440Fax: (701) 328-4880http://www.nd.gov/ndins/ Ohio Department of Insurance2100 Stella CourtColumbus, OH 43215Phone: (614) 644-3378Fax: (614) 752-0740http://www.state.oh.us/ Oklahoma Insurance Department3814 North Santa FeOklahoma City, OK 73118Phone: (405) 521-2828Fax: (405) 521-6652http://www.oid.state.ok.us Oregon Insurance Division350 Winter Street, NE, Room 440-2Salem, OR 97310Phone: (503) 947-7984Fax: (503) 378-4351http://www.cbs.state.or.us/ins Pennsylvania Insurance Department1321 Strawberry Square, 13th FloorHarrisburg, PA 17120Phone: (717) 787-2317http://www.insurance.state.pa.us Rhode Island Insurance Division233 Richmond Street, Suite 233Providence, RI 02903Phone: (401) 222-2223Fax: (401) 222-5475http://www.dbr.state.ri.us/divisions/insurance/ South Carolina South Carolina Department of Insurance1201 Main St., Suite 1000Columbia, SC 29201Phone: (803) 737-6160Fax: (803) 737-6205http://doi.sc.gov/ South Dakota South Dakota Division of Insurance445 East Capitol AvenuePierre, SD 57501Phone: (605) 773-3563Fax: (605) 773-5369http://dlr.sd.gov/insurance/ Tennessee Department of Commerce and Insurance500 James Robertson Parkway, 5th FloorNashville, TN 37243Phone: (615) 741-2241Fax: (615) 532-6934http://www.state.tn.us/commerce Texas Department of Insurance333 Guadalupe StreetAustin, TX 78701Phone: (512) 463-6169Fax: (512) 475-2005http://www.tdi.state.tx.us Utah Department of InsuranceState Office Building Rm 3110Salt Lake City, UT 84114Phone: (801) 538-3805Fax: (801) 538-3829http://www.insurance.state.ut.us Vermont Department of Financial RegulationInsurance Division89 Main Street, Drawer 20Montpelier, VT 05620Phone: (802) 828-3301Fax: (802) 828-1446http://www.dfr.vermont.gov/insurance/insurance-division Virginia Bureau of InsuranceP.O. Box 1157Richmond, VT 23218Phone: (804) 371-9967http://www.state.va.us/scc Washington Office of the Commissioner of Insurance14th Avenue and Water StreetOlympia, WA 98504Phone: (360) 753-3613Fax: (360) 586-3535http://www.insurance.wa.gov West Virginia West Virginia Offices of the Insurance Commissioner’s Insurance Education Center1124 Smith St.Charleston, WV 25301Phone: (304) 558-3386http://www.wvinsurance.gov/ Wisconsin Office of the Commissioner of Insurance125 South Webster StreetP. O. Box 7873Madison, WI 53703-3474Phone: (608) 266-3585Fax: (608) 266-9935http://oci.wi.gov/ Wyoming Department of Insurance122 West 25th Street, 3rd Floor EastCheyenne, WY 82002Phone: (307) 777-7401Fax: (307) 777-5895http://insurance.state.wy.us/
What is a FAIR plan?
If you’re struggling to get approved for a traditional home insurance policy, you might consider a Fair Access to Insurance Requirements (FAIR) plan.
FAIR plans are an option of last resort for homeowners who have exhausted other options in the standard home insurance market. These plans make it possible for some homeowners to get coverage if they have been repeatedly denied.
FAIR plans are state-managed programs, which are jointly funded by taxpayers and private insurance providers. Unlike a standard home insurance policy, where you receive coverage from one company, FAIR plans are shared market plans, where you’re insured by several companies.
With home insurance through a FAIR plan, multiple insurance companies are providing your coverage. In that regard, it limits the risk that a single insurance company has to take on. If you have a claim, the companies that insure you each pay for some of the loss.
The type and amount of coverage you can get from a FAIR plan depends on your state. However, these policies typically offer less protection than regular home insurance policies and are often more expensive.
According to the Insurance Information Institute (Triple-I), all FAIR plans include coverage for fires, vandalism, riots and windstorms. Some FAIR plans include personal liability insurance, but it depends on the state.
As of 2022, more than 30 states and Washington, D.C. offer FAIR plans to qualifying homeowners.
When should I look into getting a FAIR plan?
Once you receive notice that your homeowners insurance company dropped you, you should start shopping for new policies.. If you get denied by two or more home insurance companies, it’s probably a good idea to look into a FAIR plan. Most states require proof of denied coverage by at least two insurers before you can apply for a FAIR plan.
If your home insurance policy gets canceled, it’s important to act quickly, whether you get another standard home insurance policy or a FAIR plan. Once your policy expires, you will have no home insurance coverage.
If you let your policy lapse, it could be more difficult to get another home insurance policy in the future, and the rates could be more expensive. Additionally, if anything happens to your home or property during the lapse, you will be responsible for the damages out of pocket. You can avoid a lapse in coverage by purchasing a new home insurance policy that starts a day or two before your old policy terminates.
The bottom line
Most homeowners are able to qualify for a standard home insurance policy, but others might struggle to get coverage. If your home insurance policy gets canceled, or if you get denied coverage, there are a few things you can do.
First, figure out why the policy was canceled and see if there’s anything you can do about it. If not, start applying for new policies as soon as possible. If you’re getting turned down by multiple insurance companies, find out if your state has a FAIR plan, which usually has more flexible underwriting requirements.
Frequently asked questions
Depending on where you live and the circumstances surrounding the cancellation, it can be challenging to get home insurance after being dropped. In parts of the country impacted by severe weather events, such as Florida and California, it is becoming more difficult to obtain coverage. The first step is to shop around and find out what options may be available. If you are unable to find insurance, you may need to seek coverage through the state FAIR plan, which are state-managed programs available in 30 states and Washington, D.C.
While there isn’t necessarily a specific number of claims that causes insurance companies to drop a policyholder, companies may opt not renew policies based on one’s claim history. This could be due to the number of claims made, frequency of similar claims or the severity of claims made.
Insurance companies are typically required to provide some form of notice before cancellation or nonrenewal. This typically must take place 30 to 120 days prior to the policy ending, depending on the state’s particular laws.