Your home insurance provider may choose to cancel your policy for any number of reasons. And this can provide significant issues. Being reinstated after a cancellation can be difficult, and even finding another insurer can be a challenge.
How you will want to proceed following a cancellation will depend on why your policy was canceled:
- Canceled after inspection. If your policy was canceled following an inspection, the best thing to do is to get a list of all the hazards that your inspector found, get them fixed, and then call your insurer.
- Too many claims. A common reason for cancellation: The homeowner simply files too many claims. Eventually the insurer starts to see the policyholder as more trouble than they're worth. If this happens, you may need to find another insurance provider.
- High-risk areas. Your insurance provider may choose to simply stop covering an area due to high risk. It is uncommon, but not unheard of, for an insurer to drop an area after one bad year. Generally, insurers are looking at a pattern of losses year after year. In this instance, you may need to seek out an insurer who specializes in such areas. Or, you might consider moving.
- Pets. You don't need to get rid of your pets. Just make sure that your next insurer knows that you have pets. This is an instance where most companies will gladly cover you. They just need you to be honest.
- Poor credit. An insurer may drop you for having poor credit. It's a good idea to keep your credit score as high as you can in any event. But, if your policy is canceled, you may want to look for an insurer who is more willing to forgive your credit rating. They may charge higher premiums, however. So, this should be regarded as a temporary measure while you correct the problem.
In any event, you don't want to go without coverage. Your top priority should always be to get insured again as soon as possible.
Also Read: How Does Local Crime Impact Home Insurance Rates