Non-renewal of a homeowner’s insurance contract can be very upsetting. It means that your residence, furnishings, assets, living expenses, and other liabilities may not be covered against risks, disasters, liability, and losses.
Additionally, you may encounter difficulty getting a policy with the another provider because of the non-renewal.
Non-renewal of a homeowner’s insurance contract occurs when the insurance company refuses to renew the policyholder’s contract after expiration. It is different from cancellation as it involves a policy that has expired. Luckily for New York residents and in particular for those here on Long Island, an insurance company can only non-renew on every 3rd policy anniversary in most cases.
Reasons for non-renewal of homeowners insurance contracts
● Delay or default in premium payment
- The main reason for the non-renewal of a homeowner’s insurance contract is a policyholder’s delay or default in making premium payments.
If your homeowner’s insurance contract has lapsed, the insurance company continues to cover your home for thirty days, after which your house is left unprotected.
● How to avoid non-renewal due to delay or default in payment
Non-renewal due to delay or default in payment can get avoided by making your premium payments on time before the policy lapses. You need to check if the non-renewal is due to such default or delay. Set yourself up on automatic payment via EFT from your checking account or on your credit card.
● The insurance company may decide to no longer cover the line of risk
An insurance company may choose not to cover the line of risk under which you are protected. Due to its expensiveness, unfavorable legal or other conditions discouraging the insurance company from covering the said risk. Such considerations may prompt the company not to renew your insurance.
Under such conditions, you need not worry as the non-renewal is not your fault.
● Many claims during the policy period
A policyholder may make many claims during the subsistence of a policy period discouraging the insurance company from renewing their home insurance policy. A policy holder’s multiple claims may reduce profitability to the insurance company discouraging the company’s renewal.
● The policyholders high risk of liability
An insurance company may also not renew home insurance policies for high-risk clients. A client with a Chihuahua and small children who may increase the risk of damaging household assets may have their home insurance contract not renewed.
The benefits of a homeowner’s insurance policy in protecting the home and the assets in it cannot be understated. Non-renewal of such a policy leaves the insured unprotected sixty days after the lapse.
As such, insurance companies must give written notice of non-renewal before the expiration of the policy to allow the policyholder time to get a new insurance policy to avoid a period of non-protection.
Options after nonrenewal of a homeowner’s insurance contract
● Consult an expert
It is advisable that you enlist the services of an expert to help you find out the reasons for the nonrenewal of a home insurance contract and help you chart a way forward. An independent insurance agent is well versed on insurance matters and will guide you at this difficult time.
● Contacting the insurance company and find out reasons for nonrenewal
As earlier stated, the insurance company should give you reasons for nonrenewal. With such reasons, you may decide to;
● Contest such nonrenewal decision with your provider;
● Amend any wrongs or mitigate the risk leading to the nonrenewal;
● Shed light on the insurer’s fears prompting the nonrenewal; and
● Negotiate a middle ground with the provider.
● Getting a new policy with a new insurance company
Sometimes, the best way forward after non-renewal may be engaging another insurance company to provide you a home insurance cover.
The Bottom Line
Home insurance is necessary to protect your home and the assets from damage, liability, expenses, and liability. Nonrenewal of home insurance can be shattering. We hope this post helps you when faced with such a problem.