How You Could Lose Your Home Insurance

August 8, 2022

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Four reasons why your home insurance isn’t as secure as you think.

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Home insurance might seem like a necessary burden, but did you know that your insurance company can cancel your policy? Of course, you can lose your policy when you violate the terms of your agreement, avoid paying your premiums, or commit fraud, but your coverage could also be jeopardized if your insurance company decides that your home is too risky to cover. Here are a few of the common things that might compel your insurance company to cancel your policy:

1. An old roof.

If you have an old roof, your company might ask you to replace it or risk losing coverage. The average roof lifespan is about 30 years, and after that time, there’s a higher chance of damage and leaks. However, age alone won’t trigger a non-renewal. 

2. Having too many claims.

You might think that the company should cover you since you pay your premium, but they don’t always feel the same. If you file more than one claim in a policy term, the company will likely drop you. This is especially true if the claim is for the same thing. The average person files a claim every nine or 10 years, so if you file more frequently than that, you won’t be profitable to insure. 

You might think that the company should cover you since you pay your premium.

3. The location.

Your company might decide they don’t want to cover a specific area or state. If the area is prone to flooding, fires, or other natural disasters, the company might get too many claims there. Even if your company decides they don’t want to offer insurance, there are other ways to get covered. You can talk to an independent broker or speak with the state.

4. Pets.

Most companies include pets in the liability coverage. However, they may exclude specific animals like snakes, birds, or other exotic pets. They may also cancel coverage if you’ve filed pet-related claims in the past. Sometimes the company might offer to exclude this part of the policy, but keep in mind that you’ll be liable for any damage your pet causes. 

There are a few ways you can stay in your insurance company’s good graces, like performing regular maintenance and fixing issues before your insurance company notices. Don’t use your insurance as a maintenance policy by filing claims that barely meet your deductible. This can raise your rates and ultimately lead to your company dropping you. Have money set aside, and save your claims for the major issues.

If you have any questions about home insurance or real estate in general, feel free to call or email us. We would love to help.

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