Homeownership is a huge responsibility. Not only are you in charge of the repairs in and around your house, but you must also keep up with the mortgage and insurance. It would help if you had homeowners insurance to cover any disasters, whether they be natural such as hurricanes or tornados, or unpredictable like fire or flood. Insurance prevents you from having to rebuild or repair out of pocket should a catastrophe destroy your home. Lenders require insurance, and if you do not have it, they will force place a policy on you, which could result in much higher rates. But what to do when homeowners insurance drops you? Finding homeowners insurance after being dropped may be a daunting task, but it’s not entirely impossible. Your state and lender should provide you with information on alternative insurance, but first, you should identify why you lost it in the first place.
Reasons for Dropped Insurance
The first step in getting homeowners insurance after being dropped is to identify why you were dropped. Some reasons for dropped insurance are a lot easier to get reinstated than others. Insurance companies may drop you if they inspect a potential hazard such as a fire, pipes, or kitchen disrepair. If you are able, take care of these impending problems, and your insurance should be reinstated. Another somewhat easy fix is roof damage. If your insurance company detects roof damage, they have reason to drop you. But if you maintain or replace your roof, your insurance should be reestablished. Filing too many claims also results in loss of insurance, so avoid this if possible. If the company still refuses to reinstate, file a complaint with the state department that handles local insurers.
High-Risk Insurance
Some reasons your insurance company drops you may not be as easy to overcome or even be in your control. If you live in an area prone to natural disasters such as floods or hurricanes, finding a company to insure your home may be difficult, but not impossible. Insurance companies likely won’t drop you for a one-off natural disaster. Still, live in an area where the statistics of these disasters are high. You may find yourself looking for new homeowners insurance. If this is the case, there are high-risk insurance companies who specialize in these circumstances. Assigned risk insurers are available for homeowners if their insurance companies drop them, and a list can be found on your state website. Unfortunately, these will have higher rates, but it is better than no insurance at all.
Last Resort Options
The last resort in finding homeowners insurance after being dropped is to get lender-placed insurance coverage. This means that your mortgage company will act as your insurer. This is not ideal as it merely protects the mortgage company and not you as the homeowner. This coverage only protects that from being responsible for the mortgage should something happen to your home but will not cover personal property expenses or help with relocation. To prevent being dropped by your homeowner's insurance, it is good practice to maintain your home and not file too many claims. The bottom line is homeowners insurance is essential. There are options for getting homeowners insurance after being dropped. You must do your research and check your CLUE report (Comprehensive Loss Underwriting Exchange) to ensure that the reason you may get denied insurance is legitimate.