Unfortunately, your homeowner’s insurance company can choose to drop you at any given time, without even an explanation. For many homeowners who have religiously paid their premiums, this can come as quite a bit of a shock.
Your Insurer Drops you - now what?
Many insurance carriers choose to drop a section of homeowners for various reasons, none of which usually has to do with you. For example, your homeowner’s insurance carrier may choose to cut ties with certain areas of the country because of a great deal of natural disasters. Some carriers, on the other hand, may choose to drop you after you have filed a large claim. In both cases, they are within their legal rights to drop you.
This, however, leaves you in a precarious situation of finding a new homeowner’s insurance carrier before the contractual period on your policy has ended. Many individuals across the country - particularly those affected by Hurricanes Katrina and Ike - have discovered that their homeowner’s insurance carrier has decided not to renew their policy.
Insurance companies must give you at predetermined period of time - such as 45 to 60 days - to find a new insurer, although the time period varies from state to state.
When to Find a New Insurer
Although the likelihood of convincing your current insurer to keep you on as a policy holder is small, you can find a new company. A good first step when choosing a new homeowner’s insurance carrier is to either contact your state department of insurance or contact an independent broker who works with multiple insurance companies.
Where to Look for a New Policy
Although your homeowner’s insurance carrier may have dropped you, it doesn’t mean that you can’t find a good rate on homeowners insurance with another company, so be a savvy shopper and check for rates with several different insurance companies.
You may have more leverage with an insurance company if you have a good credit score and if you agree to carry multiple policies through them, such as homeowners and auto insurance.
If you find that homeowner’s insurance rates are too pricey for your budget, consider raising your deductible. Many times, raising your homeowner’s insurance deductible by just $500 to $1,000 can save you quite a bit every month on your homeowner’s insurance premiums.
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