What would you do if your home insurance company said that they were no longer going to insure you? The news would probably come as a pretty big blow. You depend on your home insurance to protect your house and losing that insurance might cause a little bit of panic. It can be difficult to get home insurance after being canceled or nonrenewed by an insurance company, depending on their reason for dropping your coverage. The question going through your mind might be: What do I do if my home insurance is canceled? There are a few things you can do in the event that your home insurance company drops you.
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1. Request a copy of your CLUE report.
The CLUE report is from the Comprehensive Loss Underwriting Exchange. It’s basically a database for insurers that gives information about the claims history and coverage inquiries of homeowners. Many insurance companies use them, and it’s a part of how a home insurance premium is calculated. If your insurance company is looking at the CLUE report, they might have used your record of claims to determine that you’re too risky. As a result, they might have decided to drop you.
So, you might want to request a copy of your CLUE report and check to make sure that all of the information there is accurate. If it’s not, you should have the report corrected and go back to your insurance company. Keep in mind that you’re able to request a CLUE report if your insurance has been canceled or nonrenewed for any reason other than the insurance company leaving your area entirely. Sometimes that happens, and that’s not really your fault.
2. Apply to other insurance companies.
Okay, so let’s say the CLUE was a dead end. If that’s the case, you can always look for a different insurance company and apply to different carriers. There are more fish in the sea than just the insurance company that dropped you. Now, it can be difficult to find another company willing to take you on if you’ve had a policy canceled, but you can at least find out their reason for denying you coverage. It might be your claims history, or it could be that you live in a high-risk area, like on the coast. Or maybe you have a dog that’s bitten someone – dogs have an impact on your home insurance.
So, keep applying and keep looking. You never know if you might find something.
3. Go to the state to find a FAIR plan.
If you’ve exhausted all of your possible ideas for applying to different companies, you can go to your state’s insurance commission to find out if they have any recommendations for companies to try. If that’s not successful, you can see if they can help you get access to the state’s pool of FAIR insurers. FAIR stands for Fair Access to Insurance Requirements, and these are insurers that are required to provide insurance to high-risk homeowners.
However, FAIR insurers aren’t exactly fairy godmothers who will wave a magic wand and make your problems go away. To get a FAIR plan, you still have to meet their conditions. You have to have tried to get other insurance from different companies and you will probably have to make improvements to your home to limit your risks. They might want you to, for example, repair your roof or replace your wiring. Keep in mind that if making these improvements could help you get back in the standard insurance market game, you might want to go with that to get more competitive pricing and coverage options.
4. Go to the insurance commissioner and file a complaint.
If you feel that the reason for your insurance being canceled or nonrenewal was not fair, you can file a complaint with your state’s insurance commissioner. Then they can look into the situation and help you figure out how to proceed.
If the information in the CLUE report that you requested wasn’t correct – mistakes can happen – you can file a complaint with the Federal Trade Commission.
5. Go to the insurance company itself.
You can also file a complaint with the insurance company themselves by presenting your case and see where that goes. To give a strong argument against having your home insurance canceled, think of anything that’s happened that has made your risk go down. Point out any changes in your lifestyle that have made your risk change in a good way. Then provide potential solutions – think of what you can do to lower your risk. You can also offer to take a higher deductible to show that you’re ready to shoulder some of your own risk.
If your claims are from one type of loss that keeps happening, ask if there’s a way that you can get insurance that excludes that loss. That way you’re taking on the risk, not the insurance company, and they might be okay with that. Having basic insurance that excludes your problem loss might be better than having no insurance or having high-risk insurance.
Having your home insurance get canceled can be stressful, and you might wonder what to do if your home insurance company drops you. Having your insurance canceled can make it difficult to find another insurance company to take you on. But don’t lose hope. Just keep looking and keep trying to get new insurance, whether it’s from another company or you have to go through your state’s insurance commissioner to find a FAIR plan. Remember, it’s of utmost importance to make sure your home has enough insurance.
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