Homeowners insurance is an important form that will help you cover losses and damage to your property in case of any unforeseen circumstances. Homeowners’ policy usually covers both interior and exterior damage, loss of personal assets, and injuries that happened on the property. Without this coverage, you may end up paying a large amount of money for replacement or repairs in your home. Therefore, whether you are buying a home or you already have one homeowners insurance is a must. But what are the different types of insurance and can your insurance company cancel your policy? Read this article and learn what coverage will best suit your needs and when an insurance company will cancel a homeowners policy.
Types of homeowners’ insurance
Before you decide to get insurance you should be aware of different types of homeowners’ policies. There are eight types of homeowners insurance policies:
- HO-1 – The most basic type of insurance. It covers damage to the structure of the house caused by fire, explosion, vandalism, etc.
- HO-2 – It is the extended insurance of HO-1 coverage that is also known as broad form insurance. In addition to the structure of your home, it also covers the loss of personal belongings and additional perils.
- HO-3 – This is a special form of coverage and it is the most common type of homeowners insurance. It covers damage to your home, losses of personal belongings, and some additional living expenses such as medical payments.
- HO-4 – This type of insurance is created specifically for renters. It protects your personal belongings and covers some living expenses but it doesn’t include dwelling coverage.
- HO-5 – Known as comprehensive coverage it is very similar to HO-3 insurance but it is more suitable for people with high-value items such as art, jewelry, and electronics.
- HO-6 – This type of insurance is specifically designed for condo owners. It covers damage to the structure of the condo, the interior of the condo, personal belongings, as well as some living expenses.
- HO-7 – Known as a policy for mobile or manufactured homes it covers everything as an HO-3 policy. The difference is that is specifically designed for mobile homes such as RVs, trailers, etc.
- HO-8 – This type of insurance is created for people who live in older homes that would be difficult to replace because they are historically significant or landmark houses.
Before you decide which type of insurance is the best for you be aware that the representatives from the insurance company will come to your home to evaluate it. Therefore, make sure to hire professionals such as Peak Services before the representatives arrive to repair anything in your home that might be an issue and will stop you from getting coverage for your home.
Top reasons why an insurance company will cancel a homeowners policy?
It is certain that just like any other company, insurance companies need clients and will always try to keep them. Still, if they notice that you are taking advantage of them or that you are bringing them more losses than profit they might decide to review your contract and in some cases cancel it. But they will never do that without legal reason. The most common reasons why the insurance company would decide to cancel your homeowners policy are related to the maintenance of the property. Therefore, it is not enough just to keep your home clean inside and out. You would also have to take proper care of it. Regular maintenance and repairs are something that the insurance company would expect from you. Otherwise, you might face a situation where your policy will be canceled.
An old or damaged roof
One of the most common reasons why your insurance company would cancel your policy is a damaged or aged roof. There can be many causes of roof damage and for that reason, you will require proper maintenance. In order to avoid cancelation make sure to have regular checkups of your roof and proper maintenance. Regardless of the type of material of your roof, it may be damaged due to weather conditions such as build-up ice, extreme heat, strong winds, etc. For that reason, be responsible when it comes to the preventive maintenance of the roof and avoid losing your home insurance.
Also, have in mind that the insurance company can cancel your policy not just because of the damage on the roof but because of the age of the roof as well. If your house is older or you haven’t replaced your roof for decades the company will take that as a risk because your roof might collapse. But all this can be avoided if you clean the dirt using roof pressure washing, make repairs where needed, and perform annual checkups of your roof.
Tree branches hanging over the roof
Another reason for the insurance company to cancel your home insurance is if you have trees hanging over your house. This might seem unbelievable, but the companies have a good reason for that. Hanging tree branches may cause different damage to your roof. First of all, if you don’t clean your roof regularly the fallen leaves and branches may add extra weight to your roof. Also, if trees are hanging over your house it means that they are really tall and will be the first ones to fall in case of extremely strong winds and other severe weather conditions.
On the other hand, trees are the place where birds usually build their nests. This means that you would have a flock of birds on your property whose acidic droppings may cause damage to the roof and make it weaker. For that reason, you should find ways to get rid of the birds in trees. But also, do not hesitate to contact professionals to assist you with tree branches that are hanging over your roof and avoid cancelation of your home insurance.
Installation of solar panels
There is no doubt that the installation of solar panels has many benefits. They are low maintenance as you would require just occasional residential solar panel cleaning, they will save you money in the long run and they are good for the environment. Still, if your insurance plan doesn’t include the coverage of solar panels you may face cancelation of the contract. The main reason is that the replacement of solar panels can be expensive and it requires a premium insurance plan. Some insurance companies don’t even offer coverage for solar panels which means that you would have to get additional coverage.
Apart from the type of plan that you have, the insurance company may cancel your homeowner policy because you placed solar panels on the old roof. As this can be risky and the roof may break down the companies don’t want to reimburse for that. For that reason, if you decide to install solar panels talk with the representatives from your company to prevent them from canceling your insurance policy.
The disrepair of the home
The disrepair of the home is the term used to describe numerous issues in the home that are related to property maintenance. It can refer to the issues of the exterior of the home such as blocked drains and gutters. It can also refer to the installations on your property such as supply for water, gas, and heat. But it can also refer to the issues in the interior of your home such as damaged doors, broken windows, loose stairways, etc. If the representatives of the insurance company notice any of these things they are eligible to cancel your insurance policy. This is because this will show them that there is no proper maintenance in your home.
To avoid all this, make sure that you take proper care of your home. But also be aware of the home improvement hazards that you should avoid. For example, if you notice broken tiles on your roof do not try to fix them yourself as you can get injured but contact professionals to do it. This will ensure the insurance company that you are taking care of your home. And that they will not have to reimburse you for the damage caused by improper maintenance.
Change of circumstances
The last of the top five reasons an insurance company will cancel a homeowners policy is the change of circumstances and situation in your home. This can involve many different things. For example, your roof was in good condition when you got your insurance but now it needs repair. Or you installed solar panels on the roof that is old and damaged. But the change of circumstance doesn’t have to be strictly related to the structure of the home.
For example, if you have become an owner of dangerous pets in the meantime the insurance company might cancel your policy. Usually, insurance companies cover damages that your dog made to another person or another property. But they will not cover for the damage caused by ‘non-traditional’ pets such as snakes and ferrets. Also, if you live in an area filled with birds such as Las Vegas you should consider using bird control Las Vegas services. This is because most insurance companies won’t cover the damage to the property made by birds.
Other reasons for the cancelation of your insurance
The top reasons why an insurance company would cancel your homeowners policy are mostly related to property maintenance. However, there are some other reasons that can be a warning sign for the insurers to cancel your contract.
Too many claims
It is certain that every time when you have a good reason to file a claim you should do it. But be mindful, because too many claims can lead to the cancelation of the policy as well. Even if some of the claims did not result in payment the insurer might be concerned that you are taking advantage of your contract. Therefore, before you decide to file a claim make sure to be certain that your plan is covering the specific damage and that you have a good reason to ask for a reimbursement.
Failure to make payments
All insurance companies will expect you to pay your bill on time. Still, most of them will also offer a grace period of 30 days for late payments. If you are late with your payment occasionally, the insurance company will not take that as a warning sign. But if you are late every month they might decide to cancel your contract. Every time when you fail to make a payment on time the company would have to file pending cancelation until your payment arrives. After which they would have to withdraw it. This can be an administrative burden for them which is why they could decide to cancel your insurance.
The type of risk in the area you live in may change over time. And if the insurance company evaluates your house being at a bigger risk because of the climate changes in the area, or the crime rate they might cancel your current plan. For example, because of the number of wildfires in California in 2021, insurance companies had to reevaluate their insurance plans and adjust pricing. This is not something that you can directly have an influence on. But if your area becomes a risky location for some reason you should amend your plan before it gets canceled.
The insurance company can cancel a homeowners but you can prevent that
As you can see there are a number of reasons why the insurance company will cancel a homeowners policy. However, you can still prevent that from happening by properly maintaining your home and reevaluating your insurance plan. There are many unexpected circumstances that might happen in your surrounding area. Which is why you should not allow yourself to be without coverage. Be responsible when it comes to property maintenance, do not be late with your payments and you should not have any problems with your insurer.