Home insurance companies can drop the insurance coverage on your house owing to a number of business reasons, and they can also cancel or refuse to renew policies. It happens when the insurer finds that it is too risky to insure the property.
Some of these reasons can be:
- Insurance companies can stop offering insurance policies in a particular area or state due to the high cost of claims there. If you live in an area which has had many claims, an insurer may decide that it is not financially viable to cover that area.
- They can decide that certain types of buildings have a high repair cost which makes insuring them unviable.
- When the claims history of a particular home makes it an unreasonable, therefore, unacceptable risk.
- Not paying the premium or delay in payments of premium is a common cause for dropping such insurance policies.
- Violating the terms of the policy in any way is also a valid reason for dropping the policy.
- Committing a fraud or giving false and erroneous information is a potent cause.
- Old roof or superstructure that has outlived its useful life and is in a bad state of repairs.
- Too many claims within an insurance policy term or multiple claims for similar problems. Claims made more than once in term raises a red flag.
- Although liabilities caused by pets are covered, insurers may exclude certain breeds for coverage.