It’s no secret that finding an affordable and adequate home insurance policy in Florida is tricky. So, when you do finally nab a great deal, it’s super important you try and avoid getting cancelled.
That’s right. Insurers can decide to either cancel your policy or not renew it for many reasons. It can happen during the underwriting process as well, when the insurer carries out its inspections.
But for those who have a claims history or are in a claims process, getting cancelled or non-renewed takes on a slightly different meaning.
“In my experience, non-renewal letters are not uncommon for insureds that are currently taking legal action against their insurance company for denial or underpayment of a claim,” says Elizabeth Taveras, an associate attorney at Morgan Law Group who specializes in the insurance industry.
“Even those not suing their home insurance company will sometimes get a non-renewal letter, and this is usually related to the insured having filed a claim or two in the past policy period, which is typically one year, regardless of success.”
When it comes being cancelled, however, Taveras says this a bit harsher. It can occur during a claims process where the insurance company learns false details were made on the insurance application. Information withheld from your insurance application is also grounds for cancellation.
“For example, lying about not having prior water damage in the home could lead to an entire policy rescission, as this is considered misrepresentation. Florida law is not on the side of homeowners in these situations,” Taveras says.
The impact of getting cancelled
Being left without coverage is not the only consequence of getting cancelled by your insurer. It can actually make it harder for you to find a new insurer, says Taveras. If the cancellation comes in the middle of a claims process, then the homeowner could be in a sticky situation.
“They might need a fast-moving attorney to settle and resolve their claim before the end of the policy. Time of the essence when this happens because most carriers in Florida will not issue policies for property currently in the claims process,” she says.
“Also, any amount of time where the property is not insured is considered a ‘gap’, and gaps tend to increase the cost of insurance for anyone.”
How to avoid cancellation
The best way you can avoid this situation is by being completely honest on your insurance application, Taveras says.
“Keep records of all your correspondence with your carrier,” she says.
So, if you find yourself being cancelled or non-renewed, Taveras says quick action is key.
“Homeowners will need to act quickly to try to get another policy. I recommend using Honeyquote.com, as you can do the entire application online without having to meet an agent in person,” she says.