Home Insurance Articles
What To Do When Your Home Insurance Company Refuses Renewal
2010-10-06
Most homeowners do not give a second thought to home insurance renewal, especially if payment for this coverage is paid directly by the homeowners or deducted from their mortgage payment. Every year, homeowners are surprised upon receiving a refusal of renewal from their insurance carrier. The reason for denial may be as simple as a misunderstanding, but it is imperative that the policy owner take immediate steps to rectify the situation.
There are different reasons why home insurance renewal may be refused. Although the purpose of this coverage is to aid the homeowner in case of damages or robbery, insurance companies can decide not to renew the policies of those who have filed too many claims. For some companies, two filed claims are too many. Another reason can be that the insuring company deemed the area to be a high risk due to occurrences such as floods, fires, terrorist attacks, hurricanes, or tornadoes. Periodically, insurance appraisers check on the appearance and safety of the home. A letter will be sent to the homeowners informing them of the items to be repaired, replaced or updated. If these items are not fixed prior to the deadline given by the appraiser, refusal of renewal could occur. Late payments and insufficient funds can also prompt this decision.
The refusal of renewal comes in the form of a letter from the agent or corporate office that includes the reasons for the refusal. Depending on the state laws where the homeowners reside, the insurance carrier must give them at least a 30-day notice of the denial. It is vital to call the insurance agent as soon as this letter is received in order to meet with the agent or to inform the company of the intent to complete any necessary repairs. If repairs are not the issue, further discussion to renegotiate terms, coverage, deductibles, or payment schedules may be needed for home insurance renewal. If the agent or company will not cooperate, the homeowners should contact the insurance commission of their state for assistance. The state insurance board investigates complaints, offers guidance, and answers insurance questions and concerns.
It is important to take action immediately upon receiving the refusal of renewal from the insurance company. Complete any necessary repairs and inform the agent immediately. Be persistent by calling the agent or other contact once or twice every week instead of waiting for the company to call. Do not become stranded without insurance coverage if there has been no response from the insurance company and the home insurance renewal date is drawing near. A better offer may be found with another company making the homeowners glad that they changed carriers.