Why are Homeowners Insurance Companies Dropping People like Crazy?

Many a #homeowner have had their otherwise perfect day ruined when they received a letter in the mail from their #homeownersinsurance company, informing them that they will no longer be covered. And unfortunately, this isn’t just homeowners who have had to make a claim in recent months. Even if the only interaction with your insurance company is when you send them a check each month, it’s still possible they could drop you.

One of the more common reasons that homeowners’ insurance might drop existing customers, has to do with risk management. #Insurance companies are constantly monitoring their portfolio to make sure that they are not taking on too much risk.

They look at a wide variety of data points, right down to the address of the homes they currently cover. And if there are too many homes near each other all covered by the same insurance company, that insurance company is going to want to drop some of those homes and replace them with homes in areas they don’t have much coverage in.

This is because having too many homes near each other increases the odds that a single event could wipe out a significant percentage of the homes they cover. The insurance companies want to spread their risk out over larger areas.

Other common reasons have to do with the age of the building, and whether any preventative maintenance has been performed over the years. Roofs have an age limit based on whether they are shingle, tile, or metal.

If a shingle roof gets to be too old, insurance companies will not want to cover them because the data shows they are likely to fail. The same thing goes with aging pipes and other areas within a home.

Taking proactive measures to update and maintain the systems of your house is costly, but is a key part of home ownership.

It’s absolutely legal for the homeowners’ insurance companies to drop you. There are regulations that they have to follow, but in the state of Florida, these regulations largely revolve around how much notice they give you. The amount of notice varies, although 45-60 days notice is typical.

Ok. So you’ve been dropped. Now what? Well, the good news is that, depending on the reason you were dropped, you could still get coverage from another company. Rather than tear up the letter from your insurance company explaining that they are going to drop you, bring it to your independent insurance agent (like us here at Harry Levine Insurance), and get expert advice on what your next steps should be.

If you were dropped simply because the insurance company had too many homes in your area, it shouldn’t be an issue to get you up and running with a new company. If your roof is too old, or there’s some other type of repair needed, there still might be companies out there willing to take that risk. Or it might be time for you to make the repair.

0:00 Intro
0:37 Why people get dropped
4:32 Is it legal to be dropped?
6:41 Common reasons to be dropped

[charmedu]

Why do they make you clean your yard....tell you to paint your house? If you have been living in your home for some time....if you don't say....update the plumbing. Why don't they leave you alone? Make people spend money they don't have? If something in the home is old or updated they will deny your claim anyway for not keeping something updated. I changed my house insurance. BIG MISTAKE. Was told I have to paint my house...my garage. My garage needs a gutter. Shingles were curling on garage roof and they were NOT. Said my yard had "debri". A bbq grill...some branches from a recent storm we had. Nothing major. And some dog toys. I am so mad. I should of just stayed with my old insurance company I had for 20 yrs. I did it to save a lousy $300. Now I have to dish out big money. I don't want this to happen to anyone else. I wish I knew this was going to happen. Some inspectors are real Di*k heads.

[TheShazaam]

Great advice!
Thank for explaining. My insurance company contacted my last week wanting to do a 4pt inspection ASAP on our home which I purchased 3yrs ago. This coincides with the my renewal date this month, so I guess they want to minimize risk. However, I am not inclined to allow another inspection 3yrs after purchase, and their 4pt inspection at the time was satisfactory across the board. We’ll see how this goes. Thank you again for the information.

[couponuser]

Another thing that causes non-renewals: filing small claims, or filing claims that don't involve home damage. Lost cell phones, hacked debit cards, spoiled food in the fridge, those are things you should absorb the costs for. Same thing with jewelry. If it's that expensive, have a separate jewelry policy. The coverage is better, and you don't have to resubmit appraisals if you switch insurance companies.

[winstonjames]

The density thing is a big truth...I've seen capacity run out in some areas we were selling a lot of policies in. A quote run one day will be unavailable the next. Its good to have options.

[joopterwijn]

Down hear the do it different, they just raise the price at renewal so much that you run away!

[believeroftheword]

I just rebuilt after hurricane Ida. Mostly out of pocket because I had a bad agent sell me a very insufficient policy. I made the repairs (paycheck to paycheck for ten months) and fired the agent. Upgraded lots of things around the house, including reinforced framing and a class 4 roof, as well as rewiring the house and adding a whole home surge protector. I forgot to mention the new wiring and surge protector when signing up for the new, premium policy with an EXCELLENT insurer. Should I call them back and tell them I did this or does it make no difference? I got an excellent policy with an A++ company. (JD Power rating) I live in New Orleans so I am aware of how very blessed I am right now. I just want to know if I should call back and tell the new insurance company about the wiring and surge protector or should I continue my happy dance and just be grateful for my complete storm coverage? Thanks for the advice.

[Tony-hxfj]

California has problem because of fires, lots of people losing insurance

[mogeking]

As a Florida home 🏠 owner you will need a boot 🥾 up your rear end just so your insurance company want have room to put their own boot 🥾 that way your safe.

[quartytypo]

Insurance company canceled my policy. Over the years I've saved at least $20K towards repairs that the company wouldn't cover anyway. And what about the whopping deductible?

[twinscamp]

I got a claim for wind damaged on my roof and they just sent me a non renewed noticed 😮

[rvadventures]

Just buy your insurance from overseas, it's cheaper, better service and faster response.