There are 4 primary reasons an insurance company may non-renew your homeowner policy. These are good to remember and live by.
Most consumers in Arizona probably do not realize that your insurance carrier will send out a field inspector upon your renewal. This person’s job is to do an exterior inspection, and perhaps even take pictures. That information is forwarded to your insurance carrier prior to your policy renewing.
Insurance companies hate old roofs. And homeowner’s do too because they are expensive to replace. An insurance carrier’s job is to minimize future claims. If they believe your roof is on its last legs (or nearing it) it’s in their interest to get off the risk as soon as they can.
Solution: Save your money and ensure you can replace the roof before you have a claim. If your current carrier declines to insure your roof, the chances exist that others may as well.
2) Excessive claims
What is defined as excessive may be up for debate. However, it’s whatever your insurance carrier deems as unacceptable. In a lot of cases, two claims within five years is too many. If you have a mother nature claim, your insurance company will generally look the other way….unless there are frequent mother-nature incidents. What they particularly don’t like are theft and vandalism issues.
Solution: Carry a higher deductible. You don’t really want to file small claims anyway. Save your claim in the event something bigger happens.
3) Insurer withdraws from the state
It does happen but not really all that often. At least, not in my experience. If an insurance company is relatively new to your state, they may be pricing themselves in such a way to attract customers. However, that strategy may back fire if they discover they cannot turn a profit. If they cannot turn a profit, they may tuck tail and run, leaving you without a carrier.
Solution: If you get an incredibly low insurance quote from a carrier you have never heard of ask how long they have been insuring in your state. If they are new to your state, you may want to ignore their quote no matter how low it is. What if you have a massive claim on your record when they decide to leave? You could have trouble finding new insurance.
There are certain dogs that homeowner insurance carriers simply want nothing to do with. A few common examples are Pit Bulls and Rottweilers. These breeds cause more claims than you can shake a stick at. I once had a client that I could not insure due to a Pit Bull. She was really unhappy I declined her insurance. Some months later, she called me. The dog had bitten someone and had to be put down.
Solution: If you own a dog breed similar to those mentioned above, be very upfront with your insurance agent/carrier. The last thing you want is to have a dog bite claim and find out the carrier declines coverage. You will be left holding the bag. Find a company that will insure you and your beloved pet.