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Watch Out For Homeowner Insurance Non-Renewal |
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Homeowners insurance companies in recent years haven't been advertising for new customers. Instead, they seem be trying to exhaust the list of those insured with them. So don't be surprised for getting a notice of non-renewal despite filing regular claims with your homeowner's insurance company. Some states have laws prohibiting insurers from "non-renewing" existing homeowner customers who pay premiums on time. But in most states, insurers are free to non-renew. How a Homeowner Can Avoid Insurance Cancellation Insurers rarely cancel a homeowner's policy before it expires. But if the insured does something like a potential safety hazard on the property, which invites a risk on the insurer, the latter is usually allowed to cancel an existing policy. But such cases are rare. Insurers also refuse claim for the simple reason that mostly the claims are for large amount. How to Prevent Homeowner Insurance Policy Non-Renewal Homeowner's insurance, just like automobile insurance, is a necessity which many of us think that will never come to use. But accidents, fire, theft create situations where you pat yourself on the back for having an insurance cover. But filing too many homeowner's insurance policy claims can trigger non-renewal. If you are buying a house that has a history of several claims, you may find it difficult or even impossible to buy homeowner's insurance. You may be a new buyer, but the home seller's history of insurance claims will affect your ability to obtain insurance and the rate you will ultimately pay. As a result, smart homeowners have come to realize that one should not file for insurance claims unless the loss is substantial. Another point worth practicing is that homeowners must try to raise their policy deductibles. By raising the policy deductible from $1,000 to $2,000 or more, the homeowner will save on the homeowner's insurance premium. More important, it will reduce the non-renewal risk when the claim is filed. Insure Your Home's Actual Replacement Cost to Save Money It is also seen that some homeowners indulge in insuring for the amount of their mortgage balance, which is not advisable as the mortgage balance has nothing to do with the home's replacement cost. For example, if you recently bought your house for nothing down with a 100% mortgage, you don't need a homeowner's insurance policy for the amount of your mortgage balance. More Ways to Save on Homeowner's Insurance Cut your liability insurance coverage. Homeowner's insurance policies include liability coverage. For example, if I visit your home and trip over a loose area rug, you could be liable for my injury. However, rather than carry expensive homeowner's liability coverage, you can usually save and obtain better coverage by slashing your homeowner's policy liability limit and buying an additional umbrella liability policy. Conclusion In the last few years, the homeowner's insurance market has changed drastically. Before filing claims, homeowners should also visualize the adverse fallouts, possibly policy non-renewal. Homeowners should avoid filing claims unless absolutely necessary. Last, but not the least, consult at least three local homeowner insurance agents before arriving at the best bargain. |
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