What are my options for obtaining homeowners insurance after my policy has lapsed?

If your homeowners insurance policy is about to expire, your carrier may choose not to renew it. This can be stressful, especially if you need coverage to fulfill your mortgage requirements. However, you have options. You can try to persuade your carrier to renew or look for a new insurance company that meets your needs.

If your insurance has been canceled or nonrenewed, here's what you need to know.

Find the best homeowners insurance

The difference between nonrenewal and cancellation

Your policy may not be renewed by your carrier due to various reasons, such as poor property maintenance or discontinuation of coverage in your area. A notice will be sent before the end of the policy term.

If your policy is still active, cancellation may occur, and a carrier can cancel it for any reason within the first 60 days. After that, the reasons for cancellation are limited, as per the Insurance Information Institute (III), which include nonpayment, fraud, or changes to the property that make it uninsurable.

Why your homeowner insurance was nonrenewed

A nonrenewal notice may be issued by a provider for various reasons.

• You've made too many claims
• Your insurance score has dropped
• An aging roof or HVAC system on your property has led to an increase in liability hazards.
• Non-covered features have been added, like a trampoline or swimming pool.
• You adopted a pet that's excluded from coverage
• Your insurer is no longer providing coverage in your area.

Since 2022, at least a dozen insurance companies have stopped doing business in Florida, including State Farm, due to the state's high risk of hurricanes and other severe weather.

In California, and other regions affected by wildfires, carriers such as State Farm and Allstate have stopped issuing new home insurance policies, while other companies have reduced their coverage.

What to do if you get a nonrenewal notice

According to the Consumer Financial Protection Bureau (CFPB), carriers are required to inform customers of their decision not to renew at least 30 to 90 days in advance. During this time, customers have the option to challenge the decision or search for coverage elsewhere.

Appeal

According to the Insurance Information Institute (III), most states mandate insurers to notify policyholders before canceling their coverage. If you believe the insurer made a mistake or have resolved the issue, contact your carrier's consumer affairs division to reconsider the decision. You may need to provide evidence or undergo a home inspection.

If you have any questions or concerns about your insurance coverage, you can contact your state's insurance department for assistance.

Shop for another insurer

Not being renewed doesn't mean you can't obtain insurance from another carrier or that you'll have to pay higher premiums. Obtain quotes from multiple companies to find the best price and fit.

J.D. Power's 2023 Property Claims Satisfaction Study ranks Nationwide among the top insurers for customer satisfaction, and the company provides various discounts, including those for bundling, first-time homebuyers, and security, safety, or smart-home device installation.

Lemonade offers a straightforward online application and claims process for homeowners. They accept payments through escrow accounts or credit cards, and claim that 40% of claims are resolved instantly. However, Lemonade is only available in 24 states and Washington, D.C.

How to get homeowners insurance after being dropped

If your carrier informs you that you're being dropped, it's crucial to look for new coverage immediately. Otherwise, a mortgage provider may assign you force-placed insurance, which can cost twice as much as a traditional policy, as per the CFPB. If you're facing cancellation or nonrenewal, determine the reason behind it. If it's something fixable, such as a faulty roof, take the necessary steps to maintain your current policy.

If your insurer doesn't cover swimming pools, look for companies that do.

If your car insurance coverage was not renewed because the insurer is no longer offering policies in your state, you can search for alternative carriers by visiting insurance marketplace sites, obtaining information from your state's insurance department, or asking your neighbors about the carrier they use.

Risky properties can be insured through special programs if you've received rejections on the voluntary market.

FAIR Plans

High-risk homeowners who have been rejected by traditional carriers can obtain coverage through Fair Access to Insurance Requirements (FAIR) Plans, which are available in many states. However, coverage with a FAIR plan is often more expensive and may cover less, as stated by the III. Additionally, some FAIR plans may require upgrades to electrical or heating systems.

Your state's insurance department can determine if you are eligible for a FAIR plan.

HO-8 policy

The majority of standard homeowners insurance policies are HO-3, which protects the home's physical structure and personal belongings, as well as covers liability and additional living expenses in case of relocation.

An HO-8 policy offers coverage that reimburses for the actual cash value of damaged or destroyed property or possessions, rather than their replacement cost. This policy is intended for older homes or those with historical significance, where the cost of replacing the loss exceeds the house's fair market value.

HO-8 policies only cover named perils, typically damage from:

• Fire, smoke and lightning
• Hail and windstorms
• Explosions
• Civil unrest
• Vehicles, including airplanes
• Theft or vandalism
• Volcanic eruptions

Other perils not included in the policy would not be covered.

Surplus lines policy

If your homeowners policy has been canceled or not renewed, you may consider surplus line insurance as an alternative.

Insurance companies can issue policies in many states even if they're not licensed there. To qualify for surplus line insurance, you must have been rejected by at least three to five carriers. Because the risk is higher, policies usually have higher deductibles and more exclusions.

Check with your state's insurance department to see what options are available.

FAQ

Bottom line

If your insurance company has issued a nonrenewal notice, you have the right to inquire about the reason and to challenge the decision. Additionally, you can explore other options, such as purchasing a policy from the voluntary market, a FAIR Plan, or a surplus line provider.

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