Tips If Your Insurance is Being Canceled After You Did Not Do Repairs
What to Expect and How to Negotiate With the Insurance Company
Owning a home and keeping up with repairs can be challenging. One in 3 homeowners report having to do an emergency home project a year. If your insurance company advises you they are going to cancel coverage or cancel your insurance policy because you didn't comply with a recommendation or do repairs, here's what you need to know to help protect your coverage.
What Makes an Insurance Company Require Repairs on a Home?
Requests by the insurance company for you to do a repair or provide evidence of a repair will usually come following one of three things:
- Recommendations made after a home inspection, these can relate to liability issues, or general maintenance, prevention, and safety.
- Due to questions you answered or commitments you made during your application for insurance. Is your roof old? Is your plumbing, electrical box, or water tank up to date? Insurance companies may have requirements that you have to fulfill before they will insure you.
- Sometimes, as a result of a claim, the insurance company becomes aware of a risk in your home that needs to be addressed. They have already paid out on a loss, and it is normal for them to make suggestions to prevent further losses or claims.
Do I Have To Do What My Insurance Company Asks?
If the insurance company has made a recommendation, ask them if it is mandatory or suggestive. Suggestive repairs are like tips, they may not make you do it, but suggest it for your safety. If they ask you to do a repair that is mandatory, it is a requirement of your insurance contract.
The Insurance Company Made a Recommendation, What Does That Mean?
There are often suggestive recommendations and critical ones. The suggestive recommendations should not put your policy at risk. If you are not sure if what they have asked you to do is mandatory, call them and get immediate clarification.
Don't put it off until the last minute because you need the time to understand what they require of you, and you deserve clarification as soon as possible.
Tips To Help You With Insurance Company Demands
Failure to comply or provide the information to the insurance company within the timeline they have provided may put you in a position where:
- You may not be renewed (canceled on the renewal/expiration date of the policy).
- The insurance company may cancel your policy mid-term (meaning, before the expiry of your policy) if the situation is considered critical enough. Mid-term insurance cancellations are serious. Before you get canceled you will receive a clear notification. Do not put off responding to these types of notifications.
Problems With Having Your Insurance Cancelled
Insurance is often a condition of having a mortgage. Many homeowners find themselves in very difficult situations when an insurance company cancels you. For example, if your insurance is cancelled due to non-payment, it can impact your future insurability by affecting your insurance score, which is partly based on payment history. This can cost you and make you pay higher rates of insurance.
Depending on the reason why you haven't done repairs or updates to your home, you have several options on how you can fight with your insurance company so that they do not cancel you due to incomplete repairs or renovations.
Tips to Negotiate With Your Insurer When You Disagree
If you disagree with the repairs your insurance company is asking you to do, it may be very difficult to convince them they are wrong. One way to present a strong argument is to get a second opinion from a licensed professional.
If your insurance company asks you to replace your roof because it is too old, for example, get a professional roofer to do a roof inspection. Are they asking you to install a handrail where you don't think it is necessary? Call your local city inspector and find out about handrail requirements, if you meet the safety standards, ask them to give you a report.
Insurance Company Asking to Update Electricity or Wiring
A common situation that occurs is an insurance company questioning the safety of the electrical wiring in the house. Certain types of wiring found in old homes, such as knob and tube wiring can be extremely dangerous. Another example is when the insurance company thinks your electrical box needs to be replaced or updated. There are many cases of fires starting due to overloaded electrical boxes, especially today when we have so many electrical appliances turned on at once. The power supply needed in the 1950s or even '80s is nothing compared to what we use in an average household now.
These are things that you, as an average person can not argue with. However, if you have a master electrician or professional come and check your wiring, or electrical box and the expert is willing to confirm it will be fine for another few years , you can share this new information with your insurance company and ask them to reassess.
Insurance companies know that professionals will not risk their reputation and licensing in giving false assessments, which is why a second opinion may help you in your fight with them.
Why Do I Need to Justify Things to the Insurance Company?
As frustrating as dealing with the insurance company may be, we do not always have the necessary expertise to judge the risks for ourselves. It is hard to take an insurance company telling you what to do. If your arguments are valid, get a professional qualified to make that decision to support you.
Negotiation of insurance is the negotiation of a contract agreement. It needs to remain professional, it isn't personal, even if it might feel that way.
You expect the insurance company to pay you hundreds of thousands of dollars if you have a major claim, and this is why they have a right to protect their investment by asking for critical repairs to be completed as a condition of your insurance agreement.
If you think about how much money you expect an insurance company to give you if something goes wrong, it should make it easier to understand why they have these demands. Keeping open communication with your insurance company will make things easier, and helps you stay insured at the lowest prices possible.
HomeAdvisor. "State of Home Spending." Accessed Sept. 24, 2020.