Top Reasons Insurance Policies Get Non-Renewed
Insurance is a safety net for life’s uncertainties, but what happens when your policy isn’t renewed? Non-renewals can be stressful, but understanding the common reasons behind them can help you avoid this situation. Here are some of the top reasons insurance companies decide not to renew a policy:
1. Increased Risk Factors
Insurance companies assess the level of risk they take on when insuring you. If your situation changes and they determine the risk is too high, they might not renew your policy. Common examples include:
Multiple claims filed in a short time.
Significant home damage, such as a roof in poor condition or water damage that wasn’t addressed.
A history of frequent auto accidents or traffic violations.
2. Failure to Maintain the Insured Property
If you own a home, maintaining it is key to keeping your policy. Neglected repairs, such as leaky roofs, mold growth, or outdated electrical systems, can lead to non-renewals. Insurers may see these issues as hazards that increase the likelihood of future claims.
3. Non-Compliance with Policy Terms
Policies often come with specific conditions you must follow. If you don’t comply with these terms, your insurance company may choose not to renew. Examples include:
Operating a business from home without notifying your insurer.
Renting your property without proper coverage.
Failing to report updates, like significant home improvements.
4. Lapsed Premium Payments
Late or missed payments can trigger non-renewals. Even if you’re ultimately able to pay, repeated lapses can be seen as a red flag by your insurance provider. Maintaining consistent, on-time payments is crucial.
5. Changes in Underwriting Guidelines
Sometimes, non-renewals aren’t personal. Insurance companies occasionally adjust their underwriting guidelines, especially after natural disasters or shifts in the economy. For instance, insurers might stop covering properties in areas prone to floods or wildfires.
6. Criminal Activity or Fraud
If an insurance company suspects fraudulent claims or discovers illegal activity involving the insured property or vehicle, they may cancel or choose not to renew your policy.
7. High-Risk Additions
Certain changes to your property or lifestyle can elevate your risk profile. For example:
Adding a trampoline or swimming pool without proper safety measures.
Keeping a dog breed considered high-risk for biting incidents.
Purchasing a high-performance or luxury vehicle that’s costly to insure.
What to Do If Your Policy Isn’t Renewed
Non-renewals don’t have to mean the end of your coverage. Here’s how to handle the situation:
Ask for an Explanation: Your insurer is required to provide a reason for non-renewal. Understanding why it happened can help you address the issue.
Shop Around: Every insurance company has different criteria. Another insurer may be willing to take you on at a competitive rate.
Fix the Issue: If the non-renewal is related to maintenance or other solvable issues, address them quickly and provide proof of improvement.
Work with an Independent Agent: Independent agents like us can help you find the right coverage and advocate for your needs with multiple insurers.
At Hixson & Malinowski Insurance Agency, we’re here to guide you through the complexities of insurance and ensure you stay protected. If you’ve received a non-renewal notice or have questions about your policy, contact us today—we’ll help you explore your options and get back on track.
