What to do if you are dropped from your home insurance

A comprehensive home insurance policy is most likely a good investment for any homeowner, regardless of where you live, due to the financial protection it provides. Data shows that roughly six percent of homes in the U.S. had a homeowners insurance claim in 2020. Almost 98% of those incidents were property damage claims, including theft. But while home insurance can be incredibly beneficial to your wallet, some people struggle to get it or get dropped from their policy. This can happen if you live in an area with a high risk of severe weather, like hurricanes or floods, or have filed multiple insurance claims in recent years. 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

“A home insurance company may cancel a policy for various reasons,” says David Stuart, founder and president of Southwestern Insurance Group. Here are some of the biggest reasons why your policy might be canceled:

• 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: Filing home insurance claims often causes your home insurance premium to increase. In some cases, 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.

“Home insurance providers may refuse to renew a policy for similar reasons as to why they would cancel a policy,” adds Stuart. 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 many cases, home insurance companies will set a policy to be non-renewed instead of canceling it in the middle of the policy period,” says Stuart. Then, you have until the end of the policy period to get a new insurance policy.

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.

“If you receive notice that your policy is being canceled, the first thing you should do is contact your agent regarding the notice,” says Ethan Warren, managing director at Goosehead Insurance.

Ask the agent 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 fix the situation and your policy is scheduled to be canceled, here’s what you should do next:

• 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.

Home insurance cancellation laws by state

“In most states, insurance companies must provide notice before canceling a policy, and policyholders have the right to appeal a cancellation if they believe it was done in error,” says Stuart.

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:

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  Department of insurance contact info for each state

  State	Department of Insurance Contact Information
  Alabama	Department of Insurance 201 Monroe Street, Suite 1700, PO Box 303351 Montgomery, AL 36104 Phone: (334) 269-3550 Fax: (334) 241-4192 http://www.aldoi.org
  Alaska	Department of Community and Economic Development 3601 C Street, Suite 1324 Anchorage, AK 99503 Phone: (907) 269-7900 Fax: (907) 269-7910 http://www.dced.state.ak.us/insurance
  Alaska	Department of Community and Economic Development P.O. Box 110805 Juneau, AK 99811 Phone: (907) 465-2515 Fax: (907) 465-3422 http://www.commerce.state.ak.us
  Arizona	Arizona Department of Insurance 2910 N. 44th Street, Ste. 210 (2nd Floor) Phoenix, AZ 85018-7269 Phone: (602) 364-3100 Fax: (602) 954-7008 http://www.azinsurance.gov/
  Arkansas	Department of Insurance 1200 West 3rd Street Little Rock, AR 72201 Phone: (501) 371-2640 Fax: (501) 371-2749 http://www.state.ar.us/insurance
  California	Department of Insurance 300 Capitol Mall, Suite 1500 Sacramento, CA 95814 Phone: (916) 492-3500 Fax: (415) 538-4010 http://www.insurance.ca.gov
  Colorado	Division of Insurance 1560 Broadway, Suite 850 Denver, CO 80202 Phone: (303) 894-7499, ext. 4311 Fax: (303) 894-7455 http://www.dora.state.co.us/Insurance
  Connecticut	Department of Insurance P.O. Box 816 Hartford, CT 06142 Phone: (860) 297-3984 http://www.state.ct.us/cid
  Delaware	Department of Insurance 841 Silver Lake Blvd., Rodney Building Dover, DE 19904 Phone: (302) 739-4251 Fax: (302) 739-5280 http://www.state.de.us/inscom
  Washington D.C.	Department of Insurance, Securities and Banking 810 First Street, NE, Suite 701 Washington, DC 20002 Phone: (202) 727-8000 Fax: (202) 535-1196 http://disb.dc.gov/
  Florida	Office of Insurance Regulation 200 East Gaines Street Tallahassee, FL 32399 Phone: (850) 413-3140 http://www.floir.com/
  Georgia	Insurance and Fire Safety Two Martin Luther King, Jr. Drive Atlanta, GA 30334 Phone: (404) 656-2070 Fax: (404) 651-8719 http://www.inscomm.state.ga.us
  Hawaii	Department of Commerce and Consumer Affairs, Insurance Division King Kalakaua Building: 335 Merchant Street P.O. Box 3614 Honolulu, HI 96813 Phone: (808) 586-2790 Fax: (808) 586-2806 http://hawaii.gov/dcca/ins
  Idaho	Idaho Department of Insurance 700 West State Street, P.O. Box 83720 Boise, ID 83720-0043 Phone: (208) 334-4250 Fax: (208) 334-4398 http://www.doi.idaho.gov
  Illinois	Illinois Department of Insurance 320 West Washington Street Springfield, IL 62767 Phone: (217) 782-4515 http://insurance.illinois.gov/
  Indiana	Department of Insurance 311 W. Washington St., Ste 300 Indianapolis, IN 46204 Phone: (317) 232-2385 Fax: (317) 232-5251 http://www.state.in.us/idoi/
  Iowa	Division of Insurance 330 Maple Street Des Moines, IA 50319 Phone: (515) 281-5705 Fax: (515) 281-3059 http://www.state.ia.us/government/com/ins/ins.htm
  Kansas	Insurance Division 420 SW 9th Street Topeka, KS 66612 Phone: (785) 296-7801 Fax: (785) 296-2283 http://www.ink.org/public/kid
  Kentucky	Kentucky Department of Insurance 215 West Main Street Frankfort, KY 40601 Phone: (502) 564-3630 Fax: (502) 564-1650 http://insurance.ky.gov/
  Louisiana	Department of Insurance 950 North Fifth Street Baton Rouge, LA 70804 Phone: (225) 343-4834 Fax: (254) 342-5900 http://www.ldi.state.la.us
  Maine	Bureau of Insurance 34 State House Station Augusta, ME 04333 Phone: (207) 624-8475 Fax: (207) 624-8599 http://www.maineinsurancereg.org
  Maryland	Maryland Insurance Administration 200 St. Paul Place, Suite 2700 Baltimore, MD 21202 Phone: (410) 468-2000 Fax: (410) 468-2020 http://www.mdinsurance.state.md.us
  Massachusetts	Division of Insurance South Station, 5th Floor Boston, MA 02110 Phone: (617) 521-7794 Fax: (617) 521-7772 http://www.state.ma.us/doi
  Michigan	Michigan Department of Insurance and Financial Services 611 West Ottawa Street, 3rd Floor P.O. Box 30220 Lansing, MI 48909-7720 Phone: (517) 373-0220 Fax: (517) 335-4978 http://www.michigan.gov/difs
  Minnesota	Department of Commerce 133 East 7th Street St. Paul, MN 55101 Phone: (651) 296-2488 Fax: (651) 296-4328 http://www.commerce.state.mn.us
  Mississippi	Department of Insurance P.O. Box 79 Jackson, MS 39205 Phone: (601) 359-3569 Fax: (601) 359-2474 http://www.doi.state.ms.us
  Missouri	Missouri Department of Insurance 301 West High Street, Room 630 PO Box 690 Jefferson City, MO 65102 Phone: 573-751-4126 Fax: (573) 751-1165 http://insurance.mo.gov/
  Montana	Montana Insurance Department 840 Helena Avenue P.O. Box 4009 Helena, MT 59601 Phone: (406) 444-2040 Fax (406) 444-2701 http://www.csi.mt.gov/industry/insurance.asp
  Nebraska	Nebraska Department of Insurance 941 O St. PO Box 82089 Lincoln, NE 68501-2089 Phone: (402) 471-2201 Fax: (402) 471-4610 http://www.doi.nebraska.gov/
  Nevada	Division of Insurance 1665 Hot Springs Road, #152 Carson City, NV 89706 Phone: (775) 687-7690 Fax: (775) 687-3937 http://www.doi.state.nv.us
  New Hampshire	Department of Insurance 56 Old Suncook Road Concord, NH 03301 Phone: (603) 271-2261 Fax: (603) 271-1406 http://www.state.nh.us/insurance
  New Jersey	New Jersey Department of Banking and Insurance 20 West State Street PO Box 325 Trenton, NJ 08625 Phone: (609) 292-7272 Fax: (609) 777-0508 http://www.state.nj.us/dobi
  New Mexico	Department of Insurance P.O. Box 1269 Santa Fe, NM 87504 Phone: (505) 827-4601 Fax: (505) 827-4734 http://www.nmprc.state.nm.us
  New York	New York State Department of Financial Services 25 Beaver Street New York, NY 10004 Attn: Insurance Department Phone: (212) 480-6400 http://www.dfs.ny.gov/insurance/dfs_insurance.htm
  North Carolina	North Carolina Department of Insurance Dobbs Building: 430 N. Salisbury Street Raleigh, NC 27603-5926 Phone: (919) 807-6750 Fax: (919) 733-6495 http://www.ncdoi.com
  North Dakota	North Dakota Insurance Department 600 East Blvd. Avenue, 5th Floor Bismarck, ND 58505 Phone: (701) 328-2440 Fax: (701) 328-4880 http://www.nd.gov/ndins/
  Ohio	Department of Insurance 2100 Stella Court Columbus, OH 43215 Phone: (614) 644-3378 Fax: (614) 752-0740 http://www.state.oh.us/
  Oklahoma	Insurance Department 3814 North Santa Fe Oklahoma City, OK 73118 Phone: (405) 521-2828 Fax: (405) 521-6652 http://www.oid.state.ok.us
  Oregon	Insurance Division 350 Winter Street, NE, Room 440-2 Salem, OR 97310 Phone: (503) 947-7984 Fax: (503) 378-4351 http://www.cbs.state.or.us/ins
  Pennsylvania	Insurance Department 1321 Strawberry Square, 13th Floor Harrisburg, PA 17120 Phone: (717) 787-2317 http://www.insurance.state.pa.us
  Rhode Island	Insurance Division 233 Richmond Street, Suite 233 Providence, RI 02903 Phone: (401) 222-2223 Fax: (401) 222-5475 http://www.dbr.state.ri.us/divisions/insurance/
  South Carolina	South Carolina Department of Insurance 1201 Main St., Suite 1000 Columbia, SC 29201 Phone: (803) 737-6160 Fax: (803) 737-6205 http://doi.sc.gov/
  South Dakota	South Dakota Division of Insurance 445 East Capitol Avenue Pierre, SD 57501 Phone: (605) 773-3563 Fax: (605) 773-5369 http://dlr.sd.gov/insurance/
  Tennessee	Department of Commerce and Insurance 500 James Robertson Parkway, 5th Floor Nashville, TN 37243 Phone: (615) 741-2241 Fax: (615) 532-6934 http://www.state.tn.us/commerce
  Texas	Department of Insurance 333 Guadalupe Street Austin, TX 78701 Phone: (512) 463-6169 Fax: (512) 475-2005 http://www.tdi.state.tx.us
  Utah	Department of Insurance State Office Building Rm 3110 Salt Lake City, UT 84114 Phone: (801) 538-3805 Fax: (801) 538-3829 http://www.insurance.state.ut.us
  Vermont	Department of Financial Regulation Insurance Division 89 Main Street, Drawer 20 Montpelier, VT 05620 Phone: (802) 828-3301 Fax: (802) 828-1446 http://www.dfr.vermont.gov/insurance/insurance-division
  Virginia	Bureau of Insurance P.O. Box 1157 Richmond, VT 23218 Phone: (804) 371-9967 http://www.state.va.us/scc
  Washington	Office of the Commissioner of Insurance 14th Avenue and Water Street Olympia, WA 98504 Phone: (360) 753-3613 Fax: (360) 586-3535 http://www.insurance.wa.gov
  West Virginia	West Virginia Offices of the Insurance Commissioner’s Insurance Education Center 1124 Smith St. Charleston, WV 25301 Phone: (304) 558-3386 http://www.wvinsurance.gov/
  Wisconsin	Office of the Commissioner of Insurance 125 South Webster Street P. O. Box 7873 Madison, WI 53703-3474 Phone: (608) 266-3585 Fax: (608) 266-9935 http://oci.wi.gov/
  Wyoming	Department of Insurance 122 West 25th Street, 3rd Floor East Cheyenne, WY 82002 Phone: (307) 777-7401 Fax: (307) 777-5895 http://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 plan policies are essentially a last-ditch effort for homeowners who may live in a high-risk area or have a poor insurance background,” says Warren. FAIR plans make it easier 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.

Stuart adds, “Not all states have a FAIR plan, so you should check with your state’s department of insurance to see if this is an option for you.” Currently, 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 home insurance policy is getting canceled, you should start shopping for new policies. At that point, 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.