There are a number of things that could prompt your insurance company to drop your coverage. Today, I’ll be going over four common reasons this can happen.
Selling a home? Click here for a FREE Home Price Evaluation
Homeowners usually see their payments to the home insurance company as a necessary evil. The coverage they offer protects your home, your belongings, and your investment.
Still, shelling out thousands to an insurance company can hit your wallet hard. It may seem like a large financial burden, but did you know that an insurance company can choose to drop you altogether?
Violating the terms of your agreement, not paying your premiums, or committing fraud are all examples of how this can happen. But, your coverage can also be jeopardized for other reasons. If your insurer feels you or your home are too risky to cover, you could have a hard time finding another company that will provide you with coverage.
Today, I’d like to share four common reasons an insurance company will drop you:
1. You have an old roof. This might surprise you, but having an old roof can prompt your insurance company to ask you to replace it. If you don’t, they may drop your coverage. The average lifespan of a roof is 30 years. After that length of time, your roof will become more susceptible to issues like water damage. Since water damage is the most commonly submitted home insurance claim, insurance companies want to ensure your home is not at risk. Nevertheless, age alone won’t trigger a non-renewal. If your insurance company notices issues with your roof, you can expect a letter asking that you make repairs.
“DON’T USE YOUR INSURANCE POLICY AS A MAINTENANCE POLICY BY FILING CLAIMS THAT BARELY MEET YOUR DEDUCTIBLE.”
2. You have too many claims. This might sound unfair, but it happens. Insurance companies will most likely drop a policy if you file more than one claim in the same policy term. Insurance is based on averages. The average consumer files a claim every nine or 10 years. So if you file more than that, the insurance company won’t see you as profitable. Pay close attention to how often you file claims, especially if you bundle your insurance.
3. They don’t want to cover a specific area. This might happen if the insurance company is finding that too many claims are coming in from a certain area or state. If your area is prone to crime, flooding, or fires, the insurance company may decide to cease coverage. Thankfully, there are other ways to pursue coverage if this happens to you. You can always discuss your options with an independent broker.
4. They have an issue with your pets. Insurance companies may exclude certain pets from their policies. If your pet is exotic or considered high-risk, this may pose a problem for your coverage.
With all of these things in mind, remember that there are steps you can take to stay in your insurance company’s good graces. Perform regular maintenance and make necessary repairs as soon as you become aware of them. Don’t use your insurance policy as a maintenance policy by filing claims that barely meet your deductible. Have money set aside for regular maintenance and repairs, and save your insurance for major issues.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.