Homeowners Insurance Denied or Canceled? You Aren’t Alone. Here’s What to Do Next

Whether you’ve just spent hours researching home insurance policies or been with the same insurance provider for years, it can be frustrating to be denied coverage. Insurance companies might deny your application or renewal for home insurance for several reasons, like if you live in a high-risk area, if your home needs repair, or if you have a history of nonpayment.

However, you may still have options to find the coverage you need. You can continue to request quotes from various insurance companies, find out why you were dropped or denied, and check out special state resources that may offer you coverage.

Key Takeaways

• Insurance companies might deny you homeowners insurance coverage based on your home’s condition, risk factors in your location, or your personal insurance history.
• If you have a mortgage, your lender requires home insurance, so be prepared to shop around.
• If you can’t get insurance on your home, look into special state insurance programs.
• You can file a complaint against your insurance provider if you believe you were unfairly denied.

Why Was Your Home Insurance Application Denied or Policy Canceled?

An insurer might refuse coverage for many reasons. In some cases, you can qualify for homeowners insurance by taking certain steps, but in others, you have less control. Here are just a few possible reasons you may be denied coverage:

• Your area has widespread losses 
• The insurer leaves the market in your state (often due to natural disasters)
• You failed to make insurance payments
• You filed too many home insurance claims
• Your credit score is too low
• You have financial risks like a high claims history
• Your home is too risky to insure 
• You have dogs that are “restricted breeds”

Tip

In the past, most states have required insurance companies to give you advance notice of about 20 to 60 days before they drop your coverage, but exact notification requirements vary by state. Check with your company and ask about this policy if you’re worried about your coverage. 

Steps to Take After Being Rejected or Losing Home Insurance

Once you have been denied coverage, you should prepare to take several steps to try to get coverage reinstated:

• Find out why you were denied
• Ask the insurer to reconsider your application or see if you can adjust your coverage
• Request quotes from additional insurance companies
• Ask friends and neighbors which insurers they use
• Make improvements to your home to lower its risk
• Improve your credit score
• Take out a surplus line policy if you’ve been denied by numerous insurance companies
• Search for special insurance programs in your state like FAIR
• File a complaint or contact a lawyer if you think you were unfairly dropped

Important

If you have a mortgage and lose home insurance coverage, your lender might purchase coverage for you and charge you for force-placed insurance. Since it’s usually more expensive than home insurance you can find on your own, you’ll want to contact your lender and direct them to remove the force-placed insurance once you’ve found your own home insurance policy.

The Bottom Line

You may feel powerless if your home insurance application is denied or your insurance company drops you. However, once you find out the reason you can’t get insurance, you can take steps to find coverage, like shopping around, looking into special state insurance programs, or improving personal factors that make you less of a risk to insure.