Cancelling vs. Non-Renewing a Homeowners Insurance Policy

Differences Between Cancelling and Non-Renewing a Homeowners Insurance Policy in San Diego, CA

When you pay premiums for homeowner’s insurance in San Diego, it is standard to receive a policy booklet that includes your rights as a customer as well as the rights of the insurance company. While this booklet does include pertinent information, the legalese can be quite difficult for the average person not involved in insurance to understand. If you have received a notice that your homeowners insurance policy is being cancelled, it is important to understand the difference between a cancellation and a non-renewal and when a company has the right to choose to cancel your policy.

What is a Cancellation and Why Can Your Home Insurance Be Cancelled?

Cancellation is more specifically defined as the termination of a policy at any time before the expiration date. During the initial issuance period of your policy, typically 60 days, the company has the right to cancel your insurance policy. After this period, the company can cancel your insurance for the following reasons: failure to pay premiums by the due date, there is an increase in risk, the policy was obtained through fraud.

The policy cannot be cancelled before you, as the policyholder, are notified. Each state has a notice requirement that companies must comply with, and when sending the notice the reason for cancellation must be included. Companies typically must mail the notice for cancellation 10 to 30 days prior to cancelling your plan.

What is a Nonrenewal?

A nonrenewal differs from a cancellation, because it is the process of terminating a policy at the expiration date once the annual term is over. A policy can be non-renewed because of claims, credit scores, and the property condition. If repairs must be made, homeowners must be given a reasonable amount of time to make the repairs to keep their insurance. Most companies will send a nonrenewal notice 45 days prior to the expiration date.

If you receive a notice, review your rights as a policyholder and exercise these rights. Read the details of the cancellation notice, decide if you would like to stay with the San Diego insurer and then take action.

Do you have additional questions about your homeowners insurance policy? Perhaps you’re insurance has recently been terminated and you’re looking to work with a new company. Whatever the reasons, American Tri-Star in San Diego is here to help. Contact one of our expert insurance agents today at 619-272-2100. We’ll be able to help you with any insurance related problem from find a new homeowners insurance policy to purchasing car insurance in San Diego, CA. We look forward to hearing from you!