There are many reasons a home insurance company might decide to cancel a policy. And sometimes they can cancel it after policy term has started, depending on the reason. Here’s a look at the common rules around home insurance cancellation.
Cancellation for non-payment any time
A home insurance company can generally cancel you at any time for non-payment. State laws dictate how much notice the company must give you, but in many cases it’s 10 days after you’ve missed the payment deadline.
Cancellation within less than 60 days of the start of the policy
A company can usually cancel you up to 59 days after your policy starts, for any reason. It’s within their discretion, but could involve new information they receive about the property, for example.
The company may have to give you a 10-day notice for this type of cancellation, depending on the state.
Cancellation 60 days or more after the start of the policy
Once you pass the 60-day mark, your home insurance policy is generally locked in for the rest of the year, with some exceptions. The two most common reasons you could still be canceled are:
- The company discovers you made a “material misrepresentation” that, had they known about, would have caused them to not issue the policy.
- There’s a new problem that substantially increases their risk in insuring you.
Some home insurance companies will outline other reasons they might cancel you after 60 days, such as:
- You have a violation of a fire, health, safety or building code that increases risk.
- You haven’t paid dues for a membership that’s required as a condition of the policy, such as membership in a certain association.
The company may give you a 20-day notice for this type of cancellation, depending on the state.
Problems that can lead to home insurance cancellation
After the 60-day mark, there’s still a wide variety of issues that could result in cancellation because you didn’t tell the insurer about them or because the issue started after the policy began. These lists can vary by insurer but typical situations include:
- You own an aggressive dog breed that’s banned by the home insurance company, such as a pit bull or Rottweiler. Or you have a dog with a history of biting.
- You have an older home with knob and tube or aluminum wiring.
- You or a resident family member has been convicted of arson, or have had a past home insurance policy canceled or non-renewed because of insurance fraud.
- You or a resident family member have been convicted of a felony in the last 10 years, including assault, vandalism or theft.
- The house is vacant.
- The home is used for college housing.
- There’s a home day care.
- You run a bed-and-breakfast or rent out all or part of the house through a home-sharing service such as Airbnb.
- You have a buried oil or fuel tank.
- The property has been condemned or is in disrepair.
- The property was built on a landfill.
- The property is inaccessible, such as a property that the fire department can’t get to year-round.
- You have a swimming pool that’s unfenced or that has a diving board or slide.
- You have a trampoline.
- You have a skateboard or bicycle ramp.
- You have livestock or farm animals.
- There are bars on the windows.
Is cancellation bad?
A cancellation of home insurance goes on your record as a black mark. Cancellations, claims and other information can be seen by other insurers on your C.L.U.E. report. A cancellation can lead to higher rates when you go to buy another policy.
What’s the difference between cancellation and non-renewal?
In some cases, a home insurance company will “non-renew” a policy at the end of the current term. They’ll generally give you a 30-day notice that your policy won’t be renewed, and you’ll need to shop for new homeowners insurance.
The reasons for non-renewal can be widely varied. Maybe you’ve made too many claims recently. Or the reason might not be about you personally. For example, a company might decide to reduce the number of policies it has in a particular state and non-renew many customers.
Is home insurance mandatory?
No state requires home insurance, but if you have a mortgage, the lender likely does.
Can I cancel my home insurance?
You can cancel your home insurance policy any time, including in the middle of the policy term. The insurer will send you a pro-rated refund for the remainder of the policy time. You’ll need to have new home insurance in place if your mortgage lender requires it.