Homeowners insurance non-renewals are increasing as private insurers avoid areas prone to natural disasters. Blazing wildfires have left many Western homeowners scrambling for coverage, while people in Florida and Louisiana are risking non-renewals during hurricane season.
With changing climate conditions and an increase in weather-related disasters, having house insurance coverage can provide critical peace of mind.
Here’s how to deal with a homeowner’s insurance non-renewal.
The difference between cancellation and non-renewal
Having your insurance coverage terminated is not the same as not renewing. Insurance companies cannot normally cancel a policy that has been in effect for more than 60 days unless you fail to pay your payment or they detect fraud or mistakes in your application.
Non-renewal occurs when you or the insurance company decide not to renew the policy after it expires. Insurers must normally provide you with at least 30 to 60 days’ notice if they decide not to renew your insurance.
You may receive a non-renewal notification if:
- You fail a home inspection.
- Your insurer uses aerial photos to inspect your home and discovers a risk (such as roof damage).
- You reside in a high-risk zone for wildfires, storms, and other natural catastrophes.
- Your insurer no longer offers homeowner’s insurance in your location.
- You committed fraud with your application.
How to get homeowners insurance after a non-renewal
If you get a non-renewal notice, you still have options. Here are some things you can do if your homeowners insurance isn’t renewed.
Make Home Improvements
If your policy is not renewed due to a failed inspection, making the necessary adjustments may allow you to keep coverage, even if you live in a high-risk location.
Inspections allow homeowners to address hazards, such as leaky roofs or exposed electrical wiring, in order to preserve their insurance policy.
When adding modifications to your home, consider updating the building materials. Newer materials may endure weather disasters better than older ones, while also cutting your insurance costs.
Building upgrades could include:
- To prevent fire damage, replace walls with ignition-resistant materials such as stucco or fiber cement cladding.
- For a more durable roof, consider installing impact-resistant shingles.
- If you live along the coast, consider installing hurricane-resistant windows.
Shop around for another policy
Your prior insurer may not be a choice, but you should still look around.
An independent insurance agent can compare home insurance quotes from businesses in your area. Ask your real estate agent, mortgage lender, homebuilder, or previous owner for a list of businesses, or contact your state’s insurance authority.
Turn to your state’s shared market option
If you’re still unable to find coverage, you may require a state-run shared market policy. Many states provide Fair Access to Insurance Requirements insurance for high-risk residences, as well as beach and windstorm coverage for coastal properties. FAIR plans, dubbed “last-resort” policies, provide limited coverage and are frequently more expensive than a typical home policy from a private insurer.
Below are a few examples
California’s FAIR Plan
The California FAIR Plan provides insurance for fire, lightning, internal explosions, and smoke damage, with optional coverage available at an additional cost.
These policies do not include personal liabilities, goods, or additional living expenses, which are covered by normal homes insurance policies. California homeowners can consider purchasing a “difference in conditions” policy to supplement their FAIR Plan coverage.
Florida’s state-run insurer
Citizens Property Insurance is Florida’s insurance company of last resort. It provides coverage similar to that of private insurers, including home, personal property, other structures, and supplemental living expenditure coverage, albeit the limits may be lower. In select places, the firm also offers wind-only plans that cover damage from hurricanes and other wind-related disasters. Policies are only available from an independent agency.
Louisiana’s state-run insurer
Louisiana Citizens Property Insurance Corporation is the last choice for homeowners in Louisiana who are unable to acquire coverage elsewhere. Its insurance includes the same types of coverage that private insurers do, so it will pay for lawsuits if your dog bites someone or a hotel stay if your home requires covered repairs. However, state law requires its plans to be more expensive than those of private insurance firms.Â
Consider surplus lines
If you’ve run out of other options, surplus lines insurance may be available. Surplus lines, which are offered by specialized insurers that are regulated differently than normal businesses, provide coverage for dangerous properties that other insurers will not. Available firms may differ by state, so consult with an insurance agent for surplus lines after receiving denials from at least three other insurers.
