If hail dents your siding or a tree damages your roof, having homeowners insurance can save you a lot of trouble.
But keep in mind, insurance companies aren’t required to cover you, and they can even cancel a policy mid-term if they identify new risks that increase the chances of a claim.
Amy Danise, chief insurance analyst for Forbes Advisor, explains that insurers can typically cancel a homeowners policy for any reason within the first 59 days.
After that, they can only cancel it if you miss premium payments, if there’s a change in your property, or if they find out you misrepresented information on your application.
If your policy is canceled, you should get a 30-day notice to arrange new coverage. However, getting a new policy might be tough if your previous insurance was revoked.
To avoid that situation, it’s important to understand the common reasons insurers might cancel a policy:
1. Trampolines and Swimming Pools
Adding a trampoline or swimming pool could lead to a policy cancellation because of the increased risk of injuries and expensive claims.
Pat Howard, a property insurance expert at Policygenius, says insurers know that trampolines and pools can lead to major liability issues.
If your insurer doesn’t want to cover them, they might adjust your policy to exclude related claims.
2. Running a Business at Home
Home-based businesses like daycares can put your insurance at risk if you fail to inform your insurer.
Howard notes that insurers often uncover these details during inspections, so it’s better to be upfront about any business activity to avoid cancellation.
3. A Felon in the Household
If someone living in your house has a felony conviction, your insurer might cancel the policy.
Danise points out that if you disclosed the felony when you applied, they can’t cancel it mid-term.
However, if the conviction was hidden or if a convicted person moves in later, cancellation is possible.
4. Crime in the Area
An increase in neighborhood crime might not lead to immediate cancellation, but it could make it harder to renew your policy.
If insurers consider your area high-risk, they may refuse to renew your coverage. In such cases, state-run FAIR (Fair Access to Insurance Requirements) plans might be your only option.
5. Dog Breeds Considered Aggressive
Certain dog breeds can make it difficult to maintain homeowners’ insurance. Danise says some insurers refuse to cover homes with specific breeds, including:
- Pit bulls — 100% of insurers avoid them
- Rottweilers — 100%
- Doberman pinschers — 100%
- Chow-chows — 95%
- Wolf dogs and hybrids — 93%
- Presa Canarios — 86%
- Akitas — 79%
6. Poor Home Maintenance
Neglecting repairs like loose shingles, sagging siding, or having too many roof layers can lead to policy cancellation.
In some cases, the insurer may exclude roof damage from coverage instead of canceling the policy.
Poor maintenance can also signal other risks, like outdated electrical or plumbing systems.
7. Vacant Property
Empty homes are more prone to vandalism and undetected issues like water leaks.
Howard explains that most insurers won’t cover homes that have been vacant for more than 60 days.
Furnishing the property or renting it out could help avoid a “vacant” classification.
8. Too Many Claims
Filing too many claims within a short period may lead to non-renewal. On average, insurers expect to pay a claim every nine or ten years.
Filing more than one claim per year could raise red flags and result in a policy cancellation.
9. Natural Disasters
Massive losses from hurricanes, wildfires, or other natural disasters may prompt insurers to pull out of certain regions.
Even if your policy isn’t canceled, you could face higher premiums. For example, between 2021 and 2023, home insurance rates increased by 68% in Florida, 47% in New Mexico, and 46% in Colorado, Idaho, and Texas.
Understanding these risks and staying proactive can help you avoid losing your homeowners’ insurance and make it easier to maintain coverage.
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