Home Insurance Articles
Preventing Homeowner’s Insurance Cancellations and Renewal Refusals
Homeowner’s insurance policies for nearly one million homeowners are denied or refused renewal each year. Homeowners who find themselves without insurance regardless of the reason need to find coverage or face much more expensive consequences.
Homeowner’s insurance has been considered a loss leader in the industry, especially after the heavy losses sustained resolving claims from recent natural disasters and EPA-supported mold litigation costing billions of dollars. The little profit the homeowner’s insurance industry was seeing in insuring commercial machinery, offering fidelity bonds, E&O insurance and medical malpractice insurance has also waned.
Homeowner underwriters have been ceaselessly adding interdictions to policies, escalated cancellations, and refused to renew policies, based on reviewing claims histories, or “loss reports” that are catalogued by the Comprehensive Loss Underwriting Exchange. If a home represents an unacceptable risk when compared to other homes the insurer underwrites, even if you have filed only a claim or two in a three year period, you may find yourself being refused renewal.
As a homeowner, you have the right to obtain a copy of the report from the Comprehensive Loss Underwriting Exchange and challenge the reasons for denial. You may not be cancelled or refused renewal based on race, gender, faith or economic status. Refusals may only be based on sound statistical evidence the underwriter cites as the reason for increased risk. One good way to minimize your risk of cancellation or denial of renewal is to resist the temptation to file for, or even discuss the possibility of filing a minor claim with your insurance company.
Another way to remain under the cancellation radar is to increase your deductible to $1000 or better, especially since doing that will also net you a homeowner’s insurance discount of as much as 25%. To maintain a long and claim-free relationship with your insurer, especially if you have your auto and other policies with the same company, will increase your value to them.
By maintaining your home and upgrading its plumbing, electrical and security, not only will you lessen the risk of loss, but can also merit other homeowner’s insurance discounts. Homeowners who find that their location is becoming more prone to natural disasters, such as wildfires, hurricanes and flooding can upgrade landscaping, clear brush-free firebreaks and fortify drainage systems to minimize loss. Homeowner’s insurance underwriters value policyholders who work toward minimizing the risk of loss, and prefer to maintain relationships with their most responsible customers.
