Can I Change Home Insurance After a Claim?

Home insurance provides financial protection against risks affecting a dwelling and its contents, including damages from perils like fire, theft, and natural disasters, and liability protection. Claims are a homeowner’s request for compensation from their insurer following a covered event.

Possibility of Changing Home Insurance After a Claim

Homeowners can change their insurance provider even after filing a claim. While a claim becomes part of an individual’s claims history, which insurers review, it does not automatically prevent securing new coverage. Insurers assess the type, frequency, and severity of past claims when underwriting new policies and determining premiums. A single, minor claim might have a different impact compared to multiple, significant claims.

A homeowner might consider changing policies after a claim for several reasons. Dissatisfaction with the current insurer’s claims handling process or customer service is a common motivator. Rate increases following a claim can also prompt a search for more competitive pricing. Additionally, a homeowner might seek better coverage options or a policy that aligns with their evolving needs.

Claims history is a significant factor for prospective insurers, influencing eligibility and premium rates. Insurers use this history to evaluate the risk associated with insuring a property and homeowner. While a claim can make finding new insurance more involved, it does not typically render a property uninsurable. Homeowners can often find alternative coverage, though terms and costs may vary.

Gathering Information for New Quotes

Before soliciting new home insurance quotes, homeowners must gather specific information and documents. Details about the claim are paramount, including the date of loss, the type of claim filed, and the amount the previous insurer paid out.

Comprehensive information about the property is also required for accurate underwriting. This includes the age of the home, its construction materials, and the total square footage. Details regarding safety features and recent upgrades, such as a new roof or updated systems, can influence premium calculations.

Personal details, including the names and birthdates of all residents, are necessary for the application. To understand past claims history, new insurers often request a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report. This report provides a detailed history of property insurance claims for a specific address and individual, typically going back five to seven years. Homeowners can obtain a free copy of their C.L.U.E. report annually from LexisNexis.

Steps to Transition Your Home Insurance

Once information is assembled, the homeowner can begin transitioning their home insurance. This involves shopping for and comparing new quotes from various providers. Contacting multiple insurance companies, working with independent insurance agents, or utilizing online comparison websites are effective strategies. Each quote should be reviewed to ensure comparable coverage limits, deductibles, and policy terms.

After selecting a new policy, the homeowner proceeds with the application process. This involves submitting the gathered information and undergoing an underwriting review. Secure the new coverage and receive confirmation of its effective date before formally canceling the existing policy. This prevents coverage gaps, which could leave the property vulnerable to uninsured losses. A lapse in coverage can also make it more challenging to secure future insurance.

Once the new policy is active, the homeowner can formally cancel their old policy. Upon cancellation, if premiums were paid in advance, the homeowner may be entitled to a pro-rata refund for the unused portion of the policy term. Managing the effective dates for both policies ensures a seamless transition without overlap or gaps in coverage.

Understanding Non-Renewal or Cancellation After a Claim

An insurer may choose not to renew a homeowner’s policy or may cancel it following a claim or multiple claims. Non-renewal occurs when the insurer decides not to offer a new policy term at the end of the current one. Cancellation means the insurer terminates the policy before its scheduled expiration date. Both actions are distinct from a homeowner voluntarily switching providers.

Insurers non-renew or cancel policies due to an increased risk profile, often stemming from the frequency or severity of claims. While states regulate these actions, insurers are generally required to provide advance notice, commonly ranging from 30 to 60 days, before a non-renewal or cancellation takes effect. The specific notice period can vary depending on jurisdiction.

Receiving a non-renewal or cancellation notice requires immediate action. Homeowners should promptly contact other insurers, being transparent about their claims history and the reason for the previous policy’s termination. While it may be more challenging to secure new coverage, especially with multiple claims, exploring options with different types of insurers is advisable.