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- Insurers use exposure management to minimize financial losses.
- Your policy could be canceled due to poor claims history or a change in underwriting guidelines.
- Find alternative insurance providers that offer coverage to high-risk homeowners.
- See the top expert picks for the best homeowners insurance companies in 2022.
- Claims History: If you have too many claims on your record, your insurer may refuse to renew your coverage. For example, if you have two fire-related claims, you may see a 60% premium increase. after the third claim, your insurer may choose not to cancel it due to the risk of you filing another, according to insurance.com.
- Location: Insurers may determine coverage eligibility based on where you live. For example, prior to California’s wildfire insurance law, many homeowners there found themselves not renewing due to increased cases of fire-related damage.
- Dangerous Home: If an inspection determines your home is unsafe due to potential fire hazards and a fragile structure, your insurer may refuse to renew your policy unless you address those issues.
- Problems with the roof: An old roof could put you at risk of not renewing the policy. the typical life expectancy of the roof is around 30 years, according to insurance.com. however, insurers may not reinstate your coverage if your roof is more than 20 years old. many will give the policy holder a notice of non-renewal. That notice gives homeowners time to address the roof issue before their policy expires, according to Steve Rivera, personal lines practice leader at Liberty Company Insurance Brokers.
- Pets: If you adopted a pet during your coverage that is often blacklisted by insurance companies, you may be at risk of not renewing it, as large, aggressive breeds present a liability risk.
- Bad Credit: In some states, insurance companies use insurance-based credit to determine your likelihood of filing a claim. while coverage denial is a low possibility in this case, you may see higher rates.
- Multi-Policy Discounts: Receive a discount for bundling your homeowners insurance policy with another insurance product, usually auto insurance.
- home security discount: You may be eligible for a discount if you have devices such as burglar alarms or smoke detectors installed.
- Wind Mitigation Discounts: Strengthening your home’s frame and roof against wind-related damage may qualify for wind mitigation discounts, says Gregg. Doing so is especially important in Florida, where hurricanes are frequent and damaging.
Your homeowners insurance policy protects what is probably your largest investment. however, in recent years, the risk exposure of US insurance providers has increased amid an increased frequency of catastrophic events, population migration to high-risk regions, and inflated reconstruction costs.
As a result, insurers have been more carefully managing their exposure and potential financial loss by taking steps including raising premiums and discontinuing some home insurance policies.
what is exposure management in home insurance?
Exposure management is “the practice of identifying and analyzing exposures to loss and taking steps to minimize the financial impact of the risks they impose,” according to the International Risk Management Institute (IRMI).
You may receive a letter from your insurer stating that your policy cannot be renewed due to exposure management. it means they will not continue your coverage because it is no longer profitable to do so.
Florida, in particular, is seeing an increase in non-renewals due to severe weather and increased cases of contract scams and litigation. For these reasons, insurers are practicing exposure management by raising premiums and denying coverage to some residents there, says Ken Gregg, CEO of Orion180, a homeowners insurance provider serving independent agents in the southeastern united states.
Damages from natural disasters such as tornadoes, hurricanes, severe storms, wildfires and floods totaled $92 billion in 2021, bringing the total amount since 2017 to $400 billion, according to a report by the insurance information institute (iii). Since the 1980s, the average insured loss from natural catastrophes has increased nearly 700%, according to the report.
the iii attributes the recent increase largely to more people moving to risk-prone areas. As the population in these regions grows, insurers face an increased risk of larger and more frequent claims that could exceed their ability to pay, resulting in rate increases and non-renewal of policies.
Why wasn’t my homeowners insurance policy renewed?
Not renewing your policy ultimately comes down to your insurer managing your exposure. Chances are your provider has determined that you and your home are too much of a responsibility.
Here are some specific reasons why your home insurance provider may have chosen not to renew your policy:
7 ways to get homeowners insurance after not renewing
It can be frustrating to have your policy denied. however, you have certain rights as a policyholder that your insurer must honor.
Depending on your state, your insurer must give you a certain number of days’ notice and explain the reason for the non-renewal before they drop you. Contact your provider’s consumer affairs division or your state’s insurance regulator if you believe your policy is being terminated in error.
making sure your home is paramount to protecting yourself from financial hardship. Here are seven steps you can take to get coverage after you don’t renew.
Step 1: Talk to an Independent Agent
While your insurer is required to provide the reason for non-renewal via written notice, speaking with an insurance agent may provide more clarity. An independent agent could help you understand any changes in exposure and what to do in the future, according to Jason Bataille, division growth leader in global insurance.
“A well-informed agent with the appropriate geographically specific providers can usually give you options and limit the downside of reduced coverage or higher price,” says Bataille.
Step 2: Take Efforts to Mitigate Your Risk
If your insurer decides not to renew due to a failed inspection, be sure to address those issues and take steps to protect your home from damage.
You may also consider purchasing additional coverage to protect your investments, such as flood insurance or earthquake insurance. Having additional coverages is especially important if you live in a high-risk area.
Step 3: Collect and Compare Home Insurance Quotes
the iii recommends getting quotes from at least three different companies. consider asking friends and family for recommendations. You can also contact your state insurance regulator for rates and complaint percentages for major insurers.
To compare quotes, know what’s going on in each policy’s coverage to make the best apples-to-apples comparison. A standard homeowners insurance policy will include home, personal belongings, liability protection, and coverage for additional living expenses. make sure any additional coverage you want is included in your quote.
Quick tip: Check out our guide to the best homeowners insurance companies in 2022 to start your search.
step 4: look for discounts
If you’re a high-risk homeowner, getting cheaper rates from other insurance companies can be more of a challenge. Taking advantage of discounts is key to lowering your premiums. While discounts will likely be automatically applied to your quote, talk to your insurance agent about lesser-known discounts you may qualify for.
Here are some of the most common home insurance discounts:
Step 5: Investigate the trustworthiness of the company
To ensure you get the best value, research the reliability of an insurance provider. The financial strength of an insurer, rated by independent agencies, can help you determine if it can pay a claim when you need it. AM best assigns insurance companies letter grades from A+ to F. Providers rated below “b” are not considered financially stable and cannot reliably pay claims.
You can also check a company’s trustworthiness by looking at customer satisfaction. The JD Power Home Insurance Customer Satisfaction Survey ranks the top insurance companies on a 1,000-point scale.
step 6: finalize and buy your policy
once you have selected the correct policy, please make sure all your information is correct before signing. Please note that your insurance company may require a home inspection to ensure your application’s replacement cost coverage and property information are accurate.
You also want to know how you will pay your insurance premiums. You generally pay your insurance premiums to your homeowners insurance provider or mortgage lender. You will pay your premiums in full or in recurring payments through your homeowners insurance company. If you have a mortgage lender, you may have to pay your premiums with your monthly mortgage payment through an escrow account.
Step 7: Consider Your State-Sponsored Insurance Program
If it’s difficult to get coverage from a private insurer, consider checking with your state’s fair access to (fair) insurance requirements plan, if it has one. the fair plan is a state-sponsored program that provides coverage to high-risk homeowners.
These plans are typically located in states with a high risk of natural disasters, such as wildfires and hurricanes. typically offers less coverage than a standard homeowners insurance policy. However, it could be his only coverage option, according to Rivera.
“Buying insurance after not renewing it can be a cumbersome exercise due to the number of providers available,” Rivera says. “Having the help of a broker is a great boost for policyholders looking for a wide range of options in the market.”