Being dropped by your insurance company is usually an unwelcome surprise. It can be embarrassing and affect your future homeowners insurance policies. Sometimes, finding a new insurance policy after being dropped can be challenging.
If your homeowners insurance provider won’t renew your policy, you may get worried about what to do next or how to get another home insurance policy after you’re dropped. Several people do not understand the next steps to take.
So, we read along to find out how you can get another homeowners insurance after being dropped.
Why Would Your Homeowners Insurance Company Drop You?
Your home insurance provider cannot just wake up and drop you out of the blues. In most cases, the reasons for dropping you most likely includes you failing to renew your policy.
Otherwise, the homeowners insurance company can cancel your policy because of one or more of the following reasons:
The insurance company has stopped writing all policies in a state or particular.
Your claim history: for example, if you made so many claims within a short period, the insurance company can categorize you as a high-risk client and drop you.
Status change: if an insurer drops you because of “status change”, it can mean anything from a change in your credit status to something they don’t like about your home or living situation.
Bad credit: bad credit alone cannot make you ineligible for coverage. However, the insurer might use a combination of “bad credit with a significantly poor claims history to drop you.”
In some states, the insurance provider is required to include the reason for dropping you with the cancellation notice. However, you need to check the laws of your state. If the insurer doesn’t give any explanation, you can contact them and ask for the reason why you’ve been dropped.
Can You Get Homeowners Insurance After Being Dropped?
Yes, you can get homeowners insurance after being dropped. Being dropped by your insurance provider does not make you ineligible for insurance. It only has a possibility of making you a high-risk client who should undergo further scrutiny before another insurer agrees to give you a policy.
You’re also protected by state laws, which require the insurance company to give you a notice ahead of time before being dropped. This is to help you find a new insurance provider before your current one expires and before you’re dropped. For instance, in Arizona, the law requires that the insurance company notifies you at least 45 days before the expiry date of the policy. Other states have similar requirements.
Whether or not you can get homeowners insurance after being dropped also depends on why you were dropped. If your insurer drops you because they are moving, you shouldn’t have trouble getting another insurance provider that provides coverage within your area.
However, insurance companies may decline to renew your policy if your claims history shows too many claims in a short period of time or because of “status change” or bad credit. If this is the case, you may have trouble finding another insurance company that accepts you. And if you find an insurer, you may have to pay higher premiums.
Ask For A C.L.U.E. Report After Being Dropped
C.L.U.E. stands for Comprehensive Loss Underwriting Exchange, which is an insurance database shared by insurers. If your insurance company drops you for any reason other than the company pulling out of your area or state, you are entitled to a copy of your C.L.U.E. report.
The C.L.U.E. report contains all your insurance records, including your claims history and any inquiries you made about home insurance coverage. Once you obtain your C.L.U.E. report, you should examine it to verify that the information the insurer has included is true and accurate. The information should tally with what you know about your insurance record.
If you find wrong or inaccurate information in the report, you are free to file a dispute. You can ask to have the wrong and incorrect information removed from your home insurance record.
How To Get Homeowners Insurance After Being Dropped
So, the big question is how you get homeowners insurance after being dropped.
Depending on why you’ve been dropped, and your insurance canceled, you’ll have several options to either find a new insurer or reinstate your policy. Here are three.
- Apply to other companies
- Seek state help
- File a complaint
Apply To Other Companies
You may need to apply to other companies even while you’re still dealing with your current insurance company. If the other companies refuse to give you a policy offer as well, compare their reasons with the reasons why your first carrier dropped you.
Note: If you live in a high-risk area, or if you have a bad claims history, own certain dog breeds, insurance companies may deny you a policy outright.
Whatever happens, you need to keep looking for other insurance companies. One or a few might consider giving you an offer, although the premiums might be higher.
Seek State Help
If the search becomes more challenging, you can contact the insurance commission in your state and ask for support. For example, you can ask the state for the insurance companies’ recommendations you can contact with the possibility of success.
If, for instance, you live in a hurricane-prone area, your state should be in a position to provide you with a list of insurance providers within your area. Your state may also be among the many states with pools of insurers called “FAIR” – or Fair Access to Insurance Requirements – including Arizona. These insurance providers offer insurance policies to homeowners who are either high-risk or live in high-risk areas, such as those who’ve filed a lot of claims.
You can expect this type of homeowner insurance cost to be high, but it could be the only option you have.
File A Complaint
If you feel that your insurance provider denied insurance and dropped you unfairly, you can file an insurance complaint against them with your state’s insurance commissioner. The commissioner will look at your C.L.U.E report and help you sort the situation.
If you feel that the insurer dropped you based on inaccurate information in your C.L.U.E., Insurance laws also allow you to file a complaint with the Federal Trade Commission. This is the commission that regulates the utilization of consumer information and reports such as C.L.U.E.
Besides, you also have the option to file a complaint with the insurance company itself.
In the complaint, you can ask them to review their decision as you outline the reasons you feel are erroneous and made you be unfairly dropped.
If your insurance provider has dropped you and you’re having trouble finding a homeowners insurance policy for your home, don’t give up. Just because your home or situation is considered high-risk or volatile doesn’t mean you can’t get home insurance totally. You can scrutinize your history and see why you’ve been dropped, then decide from there. If the inspection revealed some reasons that might get you dropped, you could first make home improvements then apply for insurance with another provider.