What to Do When Your Home Insurance Company Cancels Your Policy

If you’re one of thousands of Americans living in high-risk weather zones, you know the struggle of finding and keeping home insurance. Recent years of extreme weather events have resulted in huge losses for insurance companies, and as a result, many are refusing to insure homes in certain areas of the country. But, even if you live in a low-risk area, insurance companies can still cancel your policy for other reasons.

If you’ve found yourself dropped by your homeowner’s insurance company, read on to find out what steps to take next, with help from experienced insurance professional Anne Beatty.

Why Do Insurance Companies Drop Customers for Home Insurance?

Beyond nonpayment, insurance companies can cancel your coverage if they feel you, your home or your environment are too risky. Things like committing insurance fraud, lying about the condition of your home, or even getting a new dog without telling your insurance company can trigger a cancelation. “If you get a new dog that’s considered a high bite risk, they will cancel your coverage,” Beatty says.

Filing too many claims is another common reason to get dropped by your homeowner’s insurance company. “This is not only true for big claims,” Beatty says. “Lots of small claims can get you canceled, too.” Too many claims will often lead to non-renewal at the end of the term rather than immediate cancelation.

Underwriting discrepancies are also problematic. These happen when an inspection conducted by the insurance company reveals home issues that were not detailed when the policy was issued. I had this happen once when the inspector found areas of moss on my roof. Insurance companies don’t like old roofs, and if you have one, your policy could be canceled.

Living in a high-risk area can also get you dropped by your insurance. “It may be hard to find coverage in areas prone to natural disasters like hurricanes, hailstorms or wildfires, as the risk outweighs the benefit for the company,” Beatty says.

Is It Legal For My Insurance Company To Drop My Home Insurance?

Yes, it is legal, but they must provide ample notice. The amount of notice varies but is between 5 and 45 days, depending on the state.

What To Do If Your Insurance Company Drops Your Home Insurance

If your insurance company drops you, the first thing you’ll want to do is ask for a reason for cancelation and any supporting evidence.

Depending on the reason, ask the provider to reconsider their decision. “Reach out to your insurance company and see if it can be overturned,” Beatty says. “If it’s a needed repair that triggered cancelation, they’ll likely be willing to work with you.” Make any needed repairs within a certain number of days to have your coverage reinstated. If you live in a natural disaster-prone area, try to reduce your risk by making improvements to your home, like adding fireproof roofing or waterproofing windows.

If you’re definitely parting ways with your current carrier, you’ll want to shop around and find a new policy before your old one expires. Ask your neighbors for recommendations or do some online research, and compare at least three quotes from new companies before making a decision. “The larger name companies might not offer you coverage after you’ve been canceled, but smaller companies may,” Beatty says.

Can I Get My Money Back From the Insurance Company That Dropped Me?

Yes, you will receive a refund of any premium paid based on the amount of time left on the policy.

About the Expert

• Anne Beatty is a licensed insurance agent in the state of Connecticut. She has over 20 years of industry experience.

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