By Maria Sassian Triple-I Consultant
In high-risk areas such as the West Coast with its forest fires and Florida with its hurricanes and floods, insurance non-renewals increase as insurance companies try to limit their exposure to future losses. Homeowners insurance protects your most valuable possession, so the possibility of getting a message that your insurance will not be renewed can be nervous.
But do not panic if it happens- you have options.
Know the difference between cancellation and non-renewal
There is a big difference between an insurance company that cancels an insurance policy and chooses not to renew it. Insurance companies can not terminate an insurance policy that has been in effect for more than 60 days except when:
Nonrenewal is another matter. Either you or your insurance company can decide not to renew the insurance when it expires. Depending on the state you live in, your insurance company must give you a certain number of days notice and explain the reason why you do not renew your insurance.
Question about non-renewal [1
If your policy is not renewed due to a failed inspection, making proper updates can help you maintain coverage.
Look for another insurance
If your insurer insists on not renewing, shop for a new insurance. Here are some tips from Triple-I & # 39 ;s How to Save Money on Your Homeowners Insurance Guide:
- Ask friends and relatives for recommendations to insurers and then do your due diligence.
- Contact the state insurance department to find out if they make available consumer complaints per company. If they do, check out the insurers you are considering doing business with.
- Check the financial health of potential insurance companies using ratings from independent credit rating agencies and consult consumer magazines for reviews.
- Call price companies, call companies directly or access information online. Your state insurance department can also provide comparisons of prices charged by the major insurance companies.
- Get quotes from at least three companies.
- Do not trade based on price alone. Remember that you will be handling this business in the event of an accident or other emergency. When you need to file a claim, you want an insurer that offers good customer service, so test it while you shop and choose a company whose representatives take the time to address your questions and concerns.
Explore Your State Shared Market Options
If you have shopped around and can not find coverage, you may need to turn to the State Shared Market. Many states offer fair access to insurance requirements (FAIR) for high-risk homes or beach and wind storm plans for coastal properties. These insurances offer limited coverage and are often more expensive than a standard home policy from a private insurer.
For more comprehensive coverage, California homeowners can purchase a "difference in terms" policy that complements FAIR Plan coverage.
Examine Surplus Lines
The surplus market, which consists of highly specialized insurance companies, exists to provide coverage that is not available through licensed insurance companies in the standard market. Each state has rules for surplus lines and each surplus line company is monitored for solvency by its home country.
Available surplus lines companies vary by state. Talk to an insurance agent or broker about excess lines if you have been rejected by at least three other insurance companies.
Non-renewal in disaster-prone areas
State regulators push back against the trend of non-renewal by placing non-renewal moratoriums on certain zip codes, which occurred in California recently, or for some companies, as is the case in Louisiana.
If the decision not to renew is yours or your insurer's, do not wait to buy a new insurance policy. You do not want the coverage of your home to cease.