What if your homeowners insurance is canceled?
Posted by: info | June 2, 2007
Most people reading this post, most likely have serious insurance problems. What is the best way to handle your homeowners insurance policy, if it’s getting canceled? How and why would a company cancel your mortgage insurance policy? What can you do to prevent it? How can it effect your mortgage loan? These are questions we see and answer on a daily basis.
The most common reason for a company canceling a policy would be fraud. This is a no brainer. If you made a fraudulent claim, then expect your policy to be canceled. Everyone has to pay for the few who try and cheat the system. If you suspect or know of fraud, contact your local police department and report it right away. This helps everyone, and can reduce crime.
Some insurance companies are unfortunate or get hit hard and have to go out of business. If this happens to you, take it serious. There are many people who, for whatever reason, ignore these serious letters sent by a troubled company or the state. Read the entire form, and contact your state’s department of insurance for more information.
The state will have the company transfer or sell the policy to another insurance company willing to take up your current insurance companies policies. You should get the option to go with this company for the same coverage and price, as long as you fill out the proper paperwork during the appropriate timeframe. If this happened to me, I would just start a new policy all together, unless the policy was paid in full. In that case I would most likely choose the company offering the same coverage, that decided to take the policy over. I wouldn’t take this option if that company had a bad rating. To check ratings on insurance companies visit A.M. Best.
Too many claims, is another reason for an insurance company to cancel a policy. If you are forced to file several claims and your insurance company cancels your policy, then shop for a new policy. You might have to shop several insurance agents and companies to get a new policy. A lot of companies stay away from customers who file multiple claims, even if you filed claims that weren’t your fault. Contact your state’s department of insurance and ask for advice. Don’t get frustrated, continue to search for a new policy at all cost. Unfortunately, you can expect to pay much higher rates for homeowners insurance.
There are other reasons for a company to cancel a policy. Always seek help from a professional in this situation, before buying a new policy. This may help you avoid this situation again in the future. For help, find your department of insurance or find information at A.M. Best, III.org, or feel free to ask us any questions, contact us.
Posted in: Insurance, Mortgages, General |
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