3 Tips to Avoid Insurance Cancelation When You Can't Afford Repairs
Ways to Negotiate
If your insurance company is asking you to make repairs to your home that you can't afford, it may feel like you don't have any options to stop them from canceling your policy. There are always ways to negotiate with the insurance company, in most cases, if you show good will and keep open communication, the insurance company will work with you.
When you fail to comply with requests from the insurance company, they may not renew your policy when it expires, or they may cancel your policy in the middle of the term.
Every insurance company is different, so be sure and check with your own representative to understand what the consequences may be in your particular circumstance. Here are some general tips and guidelines for you to consider to try and keep your policy in force.
Option 1: Ask Your Insurance Company for More Time to Get the Work Done
Get an estimate or second opinion of the work that needs to be done by a licensed professional. Very often, the insurance company will require immediate action on repairs, but this is only because they are following their general guidelines. If you go out and get a professional second opinion, they may tell you that the situation is actually okay, or can be put off for a few months or years. This is particularly common when a home is in better shape than usual or has used special materials or received updates that only a professional in the field would be able to see.
If you start by getting the opinion from a licensed contractor, master electrician, plumber, or other expert, you will not only get a true sense of the cost of the work to, but you will also understand a realistic timeline. Sometimes these professionals can even suggest alternatives to what the insurer has suggested which can save you money.
Other times, a contractor may advise you the work can not be completed in time due to the season. If the timeline is longer than that which the insurance company has given you, let the insurance company know you have taken the necessary actions to get the work done, but that the availability of the contractor is longer than their requirement. All of this information may help you change their mind about what is a requirement. Contact your insurer before they cancel you and ask them about the options.
If you have an estimate, but the situation is simply about temporary financial restraints on your budget, then contact your insurance company and explain the situation. They may be willing to grant you an extension if your reasoning makes sense, or if you explain that you have a plan to get the renovation or repair work done when you can afford it within a specific time range.
Option 2: Shop Around
Contact other insurance companies and tell them about your situation. It is very important to present all the details of your insurance situation to them. Be forthcoming about the details of the work the insurance company wants you to and explain what your plans are. If you think your insurance company is being unreasonable, explain how you came to that conclusion using supporting facts.
Ask them if they would be willing to write your policy and give you insurance in the same circumstance? If they are, you may elect to switch to the new insurer and save yourself the hassle.
If this is the path you decide to take, always be careful when changing insurance companies that you are getting the same types of coverage, make sure to ask about limitations, especially in a circumstance like this. Only switch if they are willing to offer you the same type of coverage and you are not losing anything, If they offer you different conditions, make sure the coverage will meet your needs.
Option 3: Use the Facts to Get an Insurance Company to Change Their Mind
Take all the information you have gathered from other insurers, and from consulting professionals and present the information back to your current insurer.
Show them you have done the research. Having second opinions from respected professionals can make a big difference. Individuals at insurance companies are human just like the rest of us and sometimes they make a mistake, or fail to consider all options. If you like who you have been dealing with, give them a chance to reconsider by explaining to them what their competition is willing to do. When it comes to recommendations, they are often based on general guidelines, give them as much information as possible so they can work with you to come to a new mutually agreeable condition that will allow you to keep your insurance while still ensuring the safety of your family and home.
Does It Matter if Your Insurance Gets Canceled?
Even though it is unpleasant to have an insurance company dictate what you must do in your home, keep in mind insurers have a lot more information and expertise available to them than we do. They will only make recommendations if they perceive a true risk, and this is something you should think about for your safety as well. Too many people allow disagreements or problems with the insurance company render them uninsured, only to create a major financial loss and great hardship when a claim happens.
It is very difficult to get new insurance at a good rate and with good coverage once a policy has been canceled. Don't put yourself in this situation.
Keep open communication with your insurance company and there is a good chance you will find that they may be willing to negotiate, offer you other options, and give you the time you need if you have a solid plan to get the work done.