October 09, 2006
When can the insurer not renew your policy?
The hurricanes of the last two seasons has seen homeowners insurance providers not renewing insurance policies in many states. This of course was more in Florida and New Orleans but while things came to crisis here elsewhere things are looking bad too.
So, when can an insurance company not renew your homeowners policy?
A) Insurance companies may choose not to renew your policy if you have filed more claims than the average person. The average homeowner files a claim once every nine years. Read: Process of making a claim
B) Insurance companies may cancel your policy if your property has deteriorated to a point that it no longer meets the company's underwriting standards and
C) Hurricane losses incurred by many insurance companies have caused them not to renew policies in coastal areas.
Other reasons for non-renewal include…
1. Non-payment of premium;
2. If the insurer feels that you could be planning on committing fraud i.e. Material misrepresentation/Fraud.
3. If you are convicted for acts that increase the hazard insured against e.g. conviction for illegal storage of fireworks;
4. Discovery of willful or reckless acts or omissions by the insured increasing the hazard insured against. For example: Not getting a gas leak fixed;
5. Physical changes in the property insured which resulted in the property becoming uninsurable. For example, should the home become vacant for more that 60 consecutive days, there is automatically assumed to be a greater exposure to vandalism and damage; and
6. A determination by the Commissioner of Insurance that continuation of the policy would place the insurance company in violation of the law.
Your company must notify you of their decision not to renew your policy, at least 45 days prior to its expiration date. But your insurance company does not have to send you a notice by certified mail. They are only required to use first-class mail to the address listed on your policy.
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