Why your owner’s insurance is probably not renewed

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Most homeowners agree that once they have a homeowner’s insurance policy, they don’t have to worry about future coverage. But some homeowners are surprised when their insurance company sends them a non-renewal notice – or when their premiums jump above an affordable level. We sought advice from two insurance experts, Tampa-based Angel Conlin, CEO of Kin, a homeowners insurance company, and Ken Greg, CEO and founder of Orion180, a home insurance company based in Melbourne, Florida. Both responded by email and their responses were edited.

Question: What are some of the reasons why homeowners’ insurance will not be renewed?

Conlin: Recently, many homeowners have seen the cancellation of insurance because insurance companies are in financial trouble or the underlying risk has increased faster than their ability to adjust their pricing to that risk. This may be due to the fact that regulations slow things down or because sometimes insurers simply do not know how to adapt to something unknown.

In addition, insurance companies may not renew their policy for several reasons. For example, an insurer may decide that it no longer wants to sell a certain type of coverage, change its risk profile for a policy, or even leave the state. When this happens, a set of their policyholders may no longer qualify for coverage, so these policyholders receive notifications of non-renewal.

Greg: The reasons can be different and there is no one-size-fits-all approach to protecting your home. Sometimes an insurer decides not to renew because your home no longer meets their risk profile. This can be a lot of different things, such as that you have filed too many claims or maybe your credit rating is going down – this is also a concern and makes the insurance company re-evaluate the renewal of your owner’s policy. There are other options, such as having an aggressive pet that bites. If your insurer sees you as high risk and does not offer an exclusion to mitigate this high risk, they are less likely to renew your policy. In today’s tense insurance market, the appetite for risk is more demanding, and if you become more risky, it can push them beyond what they are willing to take. They may also choose not to renew based on their exposure concentration limits.

Conlin: For some insurance providers, non-renewal is more common when the homeowner files a number of avoidable claims and / or has an unfinished home renovation, but this is really up to the insurer. Risk and supply do not usually change very often, so responsible homeowners should not worry too much about non-renewal unless they live in a disaster-prone area.

If the homeowner lives in a disaster-prone area, taking the initiative to harden their home against the elements is a long way to keep it attractive to insurers. As an example, homeowners in Florida or Louisiana can make sure they have appropriate measures to mitigate wind storms (such as new shingles or covers) to protect their home from damage and minimize the risk of non-renewal.

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Greg: This is more common than most people think. There has been an increase in market renewal, especially in some of the housing markets that exploded after the pandemic, in the southeast and in the Persian Gulf. There has also been an increase in what we call ‘carrier abandonment’, which means that insurers are withdrawing from certain states and moving towards what they consider greener pastures.

Carriers in these regions have suffered consistent losses over the past few years from severe storms. When this happens, they do not renew the owner’s policy, forcing owners to find new coverage options.

Question: What can homeowners do to make sure their insurance policy is renewed?

Conlin: Homeowners can’t do much if their insurance company changes its risk profile or leaves the state. But they can reduce their chances of receiving a non-renewal notice if they make updates that strengthen their home, such as updating their plumbing, installing a new roof or replacing old wiring.

Homeowners who perform routine maintenance and updates usually have fewer claims because they have reduced their chances of damage. We give our members guidance on different types of risk mitigation and how this can lead to premium savings for them. Some also opt for a higher deduction to discourage smaller claims that can be avoided.

And if someone is buying a home, they must have requested a copy of the history of their claims from the Consumer Loss Underwriting Exchange (CLUE). Knowing the details of the history of their home’s demands can help them reduce their own chances of problems in the future.

Finally, it is also a good idea to communicate with your insurer. Keeping in touch tells your insurer that you are committed to taking care of your home. Provide them with proof of repairs and inspections regularly and in a timely manner to keep them up to date with the condition of your home. Make sure you regularly review your home information on your policy and inform your insurance company of any changes or incorrect information to keep your home in good condition.

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Greg: Keep your home in good condition; you need to conduct routine maintenance checks and do not allow small problems to become big ones. The best defense is a good attack. Take care of your credit. The more you build, the less likely you are to be considered too high a risk and the less likely your premiums will be. You may also consider wearing a higher deduction. This can discourage people from making small claims. It is important to remember that you can be proactive.

Question: How can a homeowner decide when to file an insurance claim and when to pay out of pocket?

Conlin: Homeowners should always notify their insurance company in the event of a loss that could lead to a claim, whether or not they want payment. This is actually a requirement in most home insurance policies. However, they can best understand the coverage of their policies by simply asking their insurance company to explain them. Have your agent or customer service representative guide you through your statement page so you know what is actually covered.

For example, normal wear and tear is usually excluded from homeowners’ insurance policies. If your insurer concludes that your damage results from daily use, then there is a high probability that the claim will be rejected.

More generally, however, homeowners are likely to want to sue when the cost of repairs exceeds their deduction – especially if they suffer a total loss. In essence, this is the reason they buy insurance: to pay for repairs that they would not otherwise be able to afford. But if the price is less than deducting them, they will pay that amount out of pocket anyway, and filing an unnecessary claim will usually increase their premium.

Homeowners can also feel pretty secure if they haven’t filed a lawsuit in about three years. Most insurance companies pay particular attention to the last three years of the history of losses in the CLUE report and may consider a claim to be an isolated incident if there are no others in that period.

Greg: While this may seem like a daunting question, we can simplify it. If your claim is much higher than the deduction, you must file the claim. That’s why in the first place you bought insurance for an unforeseen event. Use this rule whether there is partial damage, such as damage to a tree in a part of the home, or if there is a total loss such as a fire. But if the claim is less than the deduction, you do not have to file the claim. These are usually minor accidents or routine maintenance and repairs. Most people think, “Oh, my insurance would be good for that.” It’s better to keep this arrow to kill the big dragon than to use it for something small and risk your operator not renewing your policy or increasing it. your premium. There is also something to be said for the frequency of claims. Most carriers will handle your risk if you only file a claim every three years.

Conlin: Remember: Your insurance company is there to help you. If you are not sure whether to file a claim, ask. Although you will probably have to report every loss, most insurers will not force you to file a lawsuit or prevent you from filing a lawsuit. Ask many questions until you are satisfied with the likelihood that the claim will be approved.

Greg: There has been a long period of misrepresentation around insurance. Insurance exists to protect what is usually your most valuable asset, your home. Some commercials make it look like carriers will solve the slightest problem, when in fact most of the things you see on TV are unlikely to be covered by standard policy. Even when your claim is legitimate and the carrier pays the claim, this will increase your premium. You should always weigh the cost of claims against repairs.

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