What to do if Your Homeowners Insurance is canceled

Homeowners insurance protects your home — likely your most valuable asset — in case of damage from natural disasters and other events, such as theft or vandalism. In some situations, your homeowners insurance can drop you by canceling or nonrenewing your policy, leaving you without this important financial protection. Bankrate’s insurance editorial team explains the different types of home insurance terminations and what to do if your homeowners insurance is canceled or nonrenewed.

What to do for different types of homeowners insurance cancellations

There are different solutions if your homeowners insurance is canceled or nonrenewed. A cancellation or nonrenewal can also occur if you have a condo or renters insurance policy. We explain the three most common types of home insurance cancellations and how to resolve them.

Lapse of home insurance payments

Your policy could be canceled and your coverage could lapse if your home insurance payments are not made on time, leaving your home vulnerable to losses that you’d be left to pay out of pocket. Many homeowners insurance companies offer a grace period for you to make the payment to prevent your policy coverage from lapsing. Payment lapses are often the easiest insurance cancellation to resolve, and you may be able to avoid a coverage lapse.

What to do

If you have an escrow account with your home mortgage that your home insurance premium is paid through, contact your mortgage company as soon as you receive the cancellation notice to find out what went wrong with the payment. The issue could be simple as your mortgage company not receiving the bill because the mortgage clause or loan number is incorrect or missing on your insurance policy. Once you determine the reason and correct the error, find out when the payment will be sent and notify your insurance company.

If you pay the bill yourself, you should contact your insurer to pay your owed premium in full to get the policy current and avoid a lapse. Even if you have a mortgage, it may be a good idea to make a payment manually to prevent a lapse while your carrier is waiting for the payment from your lender. You should receive a refund for the amount you paid once the insurance company receives the payment from your escrow account.

Cancellation of home insurance policy

A newly in-force policy can be cancelled if your home fails an inspection conducted by the new property insurer or if the inspection determines you have undeclared structures like an in-ground swimming pool, trampoline or a detached garage. After your policy has been in force for at least 60 days, your homeowners insurance company can only cancel your policy for a few reasons:

• Claim fraud
• Failure to make timely payments
• Omitting information or misrepresenting yourself on the policy application
• Your insurer decides to immediately withdraw from the market
• Your insurer is declared insolvent by the state

While policyholders themselves can initiate a policy cancellation at any time for any reason, insurers have home insurance cancellation laws they must abide by. In most states, your insurance company must provide a written 30-day notice of the cancellation and reason before canceling the policy, giving you time to contest or find a new insurance company.  In the case that your insurer determines there has been fraud or material misrepresentation after the first 60 days of your policy being in force, your policy may be canceled immediately.

What to do

You may be able to avoid a cancellation if your payment is late by making a payment as soon as possible. There is usually no remedy for fraud or misrepresentation. If you find another company, ensure that your new policy takes effect on the same date as your current policy’s cancellation date. For a cancellation that you initiate, you may need to fill out and sign a cancellation form to fully process it. You should receive a prorated refund for any unused premium you paid in advance.

Nonrenewal of home insurance policy

Unlike a cancellation, which only occurs due to failure to pay, failing inspection, committing fraud or applications misrepresentation, your insurer can decide to nonrenew your policy when it expires for a number of reasons, including:

• Your insurer found a problem after inspecting your home’s exterior, like a roof in poor condition or structural issues
• You filed too many claims in a short timeframe
• The insurance company is no longer offering the same type of insurance in your state.
• Your insurer is no longer operating in your ZIP code or state
• You have an ineligible dog breed
• Your state’s department of insurance approved the insurance company’s request for a mid-term cancellation due to the company’s financial condition or insolvency

Your carrier may have to provide as much as 120 days advance written notice of nonrenewal to give you ample time to find alternate coverage, depending on your state laws. 

What to do

If your home fails inspection, you can fix the flagged issues and submit proof to your insurer to avoid nonrenewal. You may have to switch home insurance companies for situations you aren’t able to resolve like having a dog breed your company will no longer cover, the company becoming insolvent or the company no longer offering coverage in your state. 

What will my mortgage company do if my home insurance is canceled?

Force-placed insurance may be placed on your property by your lender if your homeowners insurance is canceled and you don’t remedy the situation or find another policy to replace it. 

Force-placed insurance does not favor the homeowner. A force-placed policy is typically much more expensive than purchasing a policy on your own — typically running 5–10 times higher than a standard policy — and may not offer the same level of coverage as your previous policy. It generally won’t cover your personal property and may leave you exposed to liability claims as well. 

Can I contest a home insurance cancellation?

You may be able to contest a cancellation or nonrenewal, depending on the situation. If you have an insurance agent, they may be able to work directly with your insurer’s underwriter to come to a compromise, or you could call your company directly. If you have filed numerous claims, for example, you may be able to increase your deductible or remove a certain coverage in exchange for the company keeping your policy. However, it may be a good idea to get quotes from other home insurers as a backup so that you are not left scrambling to find coverage quickly if your negotiations fail.

Can I still get home insurance after being dropped from my insurer?

Unfortunately, it may be harder — but not impossible — to find coverage after a cancellation or nonrenewal, especially if you have numerous claims or your home is in poor condition. If you are having trouble finding affordable home insurance after a cancellation, it may benefit you to check around for providers offering coverage for high-risk homeowners in your area. Or, if your home insurance policy was canceled after an insurance inspection, quickly addressing the issue (like fixing up an older roof) may help get you back into your insurer’s good graces. 

If your policy cancellation was due to an act of insurance fraud, you may have an extremely difficult time finding replacement coverage. If you get denied coverage by multiple private insurance companies, you should check to see if your state has a FAIR plan option, which is state-run programs for high-risk homes. You can work with an agent to help you find coverage through an excess and surplus lines carrier that writes policies for higher-risk homes not covered through the standard market.

Frequently asked questions

• Why is my homeowners insurance being canceled?
  

  There are many reasons why your home insurance could be canceled or nonrenewed. Your insurer is required to provide you with a written cancellation or nonrenewal notice containing an explanation for their action and giving you a specified amount of time before your coverage ends. Your coverage may have lapsed for nonpayment of premium, your insurance company may decide not to renew your policy due to claims you have made or significant issues may have been discovered during the insurer’s inspection of your home, among other reasons.

• How do I cancel a home insurance policy?
  

  To cancel a home insurance policy, you will first need to contact your current provider. If you have a mortgage on your home, you will also need to contact your lender as it is typically a requirement to carry home insurance. You will also need to notify your insurer and lender if you decide to switch providers, and you may need to sign a cancellation form.

• What home improvements could make it more likely for my insurer to renew my policy?
  

  Home improvements that enhance the safety, security and condition of your home are more likely to positively influence your insurer’s decision to renew your policy. Examples include installing a new roof, upgrading electrical and plumbing systems, reinforcing windows and doors against storms, adding a security system or implementing measures to protect against fire and water damage. These improvements not only reduce the risk of claims but can also help to avoid some of the common scenarios resulting in nonrenewal of home insurance.

• How does getting a new pet affect my home insurance?
  

  Getting a new pet could impact your home insurance in a few ways. While most standard home insurance policies cover liability for pet-related incidents, certain breeds of dogs or other exotic animals may be excluded or require additional coverage due to a perceived higher risk. Additionally, pets can cause damage to your property, which may affect your coverage or premiums. It’s essential to inform your insurance provider about any new pets to make sure that you have adequate coverage, understand any potential changes to your policy terms and avoid unexpected home insurance cancellation.

• What are some common reasons for nonrenewal of home insurance?
  

  Common reasons for nonrenewal of home insurance include a history of frequent claims, failure to maintain the property, living in a high-risk area prone to natural disasters, changes in underwriting guidelines or risk assessment by the insurance company and failure to pay premiums on time. Additionally, if an insurer decides to reduce its risk exposure in certain areas or implement a voluntary withdrawal from the market, they will issue policy non-renewals. It is crucial for homeowners to stay informed about their policy terms and maintain their property to minimize the risk of having home insurance canceled or nonrenewed.

  Home insurance exists to protect you from potentially catastrophic costs in the event of a disaster such as a fire, burglary or windstorm. If your homeowners insurance is canceled or nonrenewed, you could be at risk financially. In this guide, Bankrate’s insurance editorial team takes a deep dive into why and when a carrier might choose to cancel or nonrenew your policy, and what home insurance cancellation rights you may have if it happens.