Can home insurer cancel coverage after claim?

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It’s rare that a home insurance company would drop your coverage or increase your rates after only one claim, especially if it was out of your control — such as a hail storm that damaged the roof. Generally, a single claim shouldn’t boost your rates unless it removes a discount you received for maintaining a clean claims history.

However, major damage that you’re at fault for could result in a rate hike. But you shouldn’t worry about your insurer canceling your policy — it is illegal to do so. When it is time to renew your coverage, however, your insurer can choose not to renew your policy.

Can a homeowners insurance company drop you after a claim?

In some cases, it is possible for a home insurance company to drop your coverage filing a claim. However, there are specific conditions that must be met for this to occur.

For example, if you have filed multiple claims within the past few years, your home insurance company might cancel your policy. Homeowners with a lengthy claim record are generally viewed as riskier to insure. In addition, an insurance company may choose not to renew your home insurance policy for various reasons, such as if they are withdrawing business from your area. It is illegal to cancel your insurance policy just because you filed a claim.

What to do if your home insurance policy is canceled mid-term?

If your home insurance policy is canceled mid-term, contact your insurance company. Speak to a representative or agent and find out why your policy was canceled. Ask if there is anything you can do to reverse the cancelation.

If reinstating your policy is not an option, or if you prefer to switch insurance providers, start shopping around for new homeowners insurance policies. Get quotes from different insurers to compare coverage options and pricing.

How many claims can I file before my homeowners insurance is canceled?

There is no set number of claims that trigger a cancelation of a homeowner’s insurance policy. However, filing too many claims in a short time can cause issues with your insurer, and two claims in five years can cause your home insurance premiums to rise. Over two claims in the same period may affect your ability to find coverage and even lead to policy cancelation.

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Is it difficult to get home insurance after being dropped?

Depending on the reason for the cancelation or non-renewal, getting home insurance after being dropped can be challenging. However, it is not impossible to obtain a new policy.

The easiest way to get another homeowners insurance policy after being dropped by your insurer is to shop around for another policy. Consult with insurance agents or brokers to help you navigate the insurance market and find suitable options.

What if I can’t get homeowners insurance because of claims?

Different insurance companies have different underwriting guidelines. While some may deny coverage due to claims history, others might be more lenient. Try reaching out to multiple insurance providers to explore your options. Some insurers specialize in providing coverage for properties with higher risk factors, such as prior claims. Look for companies that offer coverage specifically for homes with a claims history.

Some states offer insurance programs for homeowners who are unable to obtain coverage through the private market due to high-risk factors. These programs are called “Fair Access to Insurance Requirements (FAIR) Plans.”

FAIR Plan policies often come at a higher cost than private insurance, and their coverage may be more limited. However, they provide insurance protection when no other options are available. FAIR Plan includes coverage for losses resulting from fire, vandalism, riots, and windstorms.

Final thoughts

Insurance companies typically cannot cancel your policy in the middle of the policy term unless there is a valid reason, such as fraud or non-payment of premiums. However, they may choose not to renew your policy when it expires, and they often have the right to do so. Insurance companies can typically non-renew a policy if they have a reasonable cause, such as a pattern of frequent claims or if the insured property presents a higher risk. The definition of “reasonable cause” varies by state.

Shivani Gite

Contributing Writer

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions.