Updated: August 7, 2025
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Homeowners insurance providers can drop you or cancel your policy if you’ve missed payments, have too many claims, live in a high-risk area or have conducted insurance fraud.
Being dropped has consequences, as it can raise future premiums and limit the number of providers willing to offer you a policy.
If your homeowners insurance dropped you, identify the cause, resolve the issue and shop around for a new policy to avoid lapses in coverage and remain financially protected.
Homeowners insurance companies can cancel or choose not to renew your policy for several reasons, including missed payments, excessive claims, property risks or fraud. Insurers regularly evaluate risk and may drop your coverage if they determine it's no longer viable. You'll typically receive written notice, but a coverage gap leaves your home financially vulnerable during emergencies.
Your insurer may drop you if you routinely miss payments. On-time payments maintain your policy and ensure ongoing coverage. Multiple missed payments indicate unstable finances and higher risk for insurers.
If you make significant changes to your property, such as adding a pool or neglecting safety precautions, your insurer may drop you. These modifications may increase the risk of accidents or property damage, prompting insurers to review your coverage. Notify your insurer of any changes and ensure these comply with your policy terms.
You risk immediate policy cancellation if you submit fabricated or inflated claims. Insurance fraud is a crime that carries legal consequences beyond policy cancellation. Always provide your insurer with accurate information to maintain your coverage.
Living in an area prone to natural disasters like wildfires, floods or hurricanes can make it harder to keep your policy. If risk increases due to climate trends or local infrastructure changes, insurers may choose to withdraw from the area or drop individual policies.
Using your home for business purposes, such as running a daycare or renting it out on platforms like Airbnb, without proper coverage or disclosure can result in cancellation. Insurers require accurate information about how your property is used.
Homeowners insurance can drop you after a claim if the insurer considers you a higher risk. The decision often hinges on the nature and frequency of claims. Insurers might cancel policies if they anticipate future claims that could affect their financial stability.
Here are examples of when homeowners insurance providers might drop you after a claim:
If you file several claims in a short time, your insurance may drop you. High claim frequency signals a high-risk property, which makes insurers reevaluate their coverage. Handling minor repairs yourself is often better than filing claims.
Filing a large or expensive claim may result in policy cancellation. Insurers view large claims as a sign of future high costs, prompting them to reduce risk by removing coverage.
There’s no exact limit, but filing two claims within three to five years can cause your premiums to spike. If you file three or more, some insurers may see you as too risky and decide to cancel or not renew your policy. To avoid this, save claims for major damage and pay for smaller repairs yourself when possible.
Homeowners insurance can end either through cancellation or non-renewal. While both mean your coverage is ending, the reasons and timelines are different. Use the table below to understand how they compare:
When It Happens | During the policy term | At the end of the policy term |
Typical Reasons | Missed payments, fraud, unsafe property conditions | Multiple claims, high-risk location, insurer exiting the market |
Notice Period | Usually 10–30 days (varies by state and reason) | Typically 30–60 days before renewal date |
Impact on Record | May be more serious; can make getting new insurance harder | Less severe, but still raises red flags with some insurers |
Can You Appeal? | Sometimes, especially for maintenance or payment issues | Not always, but asking for reconsideration may help |
Next Steps | Fix the issue immediately and shop for a new policy | Use the notice period to compare quotes and line up new coverage |
After being dropped by your provider, insurers view you as a higher risk, which can lead to higher premiums, fewer coverage options and stricter policy terms.
Here's what to expect and why acting quickly matters if your homeowners insurance is canceled or not renewed:
Insurers may charge higher premiums if you've been dropped. This can increase your financial burden and make it harder to afford necessary coverage. Shopping around and comparing quotes will help you find the best rates.
Being dropped can limit the number of insurance providers willing to offer you a policy. This restriction can force you to accept less favorable terms or insufficient coverage.
New insurers might impose stricter terms and conditions on your policy after you've been dropped. These conditions can include higher deductibles, more exclusions or rigorous maintenance requirements. Understanding these terms helps you manage your policy effectively.
If you struggle to find a new policy quickly, you risk a lapse in coverage. This gap leaves your home unprotected and can lead to significant financial loss if damage or disaster strikes. Securing new coverage quickly maintains continuous protection.
Yes, you can usually get a refund if your homeowners insurance is canceled before the end of the policy term. Most insurers will return the unused portion of your premium on a pro rata basis, meaning you'll be refunded for the days you paid for but didn’t use.
However, if you cancel the policy, some insurers may charge a short-rate fee, which slightly reduces your refund. If your insurer cancels it, you’re more likely to receive the full prorated amount. To get your refund quickly, confirm the cancellation date with your insurer and submit any required documents.
A canceled homeowners insurance policy won’t directly affect your credit score, since insurers don’t report cancellations to credit bureaus. However, if your policy is canceled due to nonpayment, and you leave an unpaid balance, the insurer may send that debt to a collections agency, and collections can appear on your credit report, damaging your score.
To avoid this, always settle any remaining balance with your insurer, even if your policy is no longer active. While cancellations themselves don’t show up on credit reports, a history of missed payments may still influence your credit-based insurance score, which some insurers use to set premiums.
If your homeowners insurance provider drops you, start by contacting the insurer to understand the reason for cancellation. In some cases, like missed payments or maintenance issues, you may be able to appeal the decision or request reinstatement by resolving the problem and providing documentation.
If reinstatement isn’t possible, immediately shop for a new policy to avoid a coverage gap. Acting quickly helps maintain continuous protection for your home.
Getting homeowners insurance after being dropped or not renewed can be challenging, but it's possible with the right approach. Understand the reasons for your policy cancellation and address those issues promptly. Follow these steps to get new homeowners insurance after being dropped.
Find out why your insurer canceled your policy. Understanding what went wrong helps you fix the problem so it doesn't happen again.
Talk to your former insurer about the cancellation before searching for new coverage. Sometimes you can fix the problems that led to cancellation and reinstate your policy. Keeping communication open with your insurer may help you prevent future cancellations.
Request a Comprehensive Loss Underwriting Exchange (CLUE) report. It shows insurers your claims history, so make sure everything's accurate before you start applying for new coverage.
If reinstatement isn't possible, compare homeowners insurance quotes from multiple providers. This helps you find coverage that fits your needs and budget.
When applying for new homeowners insurance, provide accurate and complete information. Transparency helps you secure coverage, and withholding or misrepresenting information could lead to future complications.
A Fair Access to Insurance Requirements (FAIR) Plan is an option if traditional homeowners insurance providers can't cover you. These plans are designed for homeowners with risk factors that make traditional insurers hesitant to provide coverage, such as those in high-risk locations. FAIR Plans are state-run and supported by taxpayers and commercial insurance carriers.
FAIR Plans operate differently from traditional insurers, using shared market plans that distribute risk among several insurers. While they provide basic coverage, it's usually restricted and often only covers personal property and dwelling on a named perils basis. You may have limited or no options for liability, medical expenses or loss of use coverage. Despite these drawbacks, a FAIR Plan can provide essential protection for your home if other options aren't available.
To avoid being dropped by your homeowners insurance provider, make timely premium payments, minimize claims and keep your property in good condition. Here are tips to help you maintain your home coverage:
What to Do | Explanation |
|---|---|
Pay Premiums on Time | Consistently pay your insurance premiums by the due date to avoid cancellation for nonpayment. Setting up automatic payments can help ensure you never miss a payment. |
Limit Claims | Only file claims for significant damages and handle minor repairs yourself. Frequent claims can signal higher risk to insurers, increasing the likelihood of policy termination. |
Maintain Your Property | Regularly inspect and maintain your property to prevent potential issues. Addressing hazards and keeping your home in good condition reduces the risk of accidents or damage, making you a more favorable policyholder. |
Provide Accurate Information | Always provide truthful and complete information when applying for or updating your insurance policy. Misrepresentation or inaccuracies can lead to cancellation if discovered by the insurer. |
Communicate With Your Insurer | Keep open communication with your insurance provider. Inform it of any significant changes to your property or circumstances to ensure your policy remains appropriate and valid. |
Homeowners insurance companies can cancel or not renew your policy for reasons like missed payments, frequent claims or changes in risk. If this happens, act quickly — address the issue, compare new quotes and secure coverage to protect your home and finances.
To help you understand and manage homeowners insurance cancellation, we've compiled a list of frequently asked questions.
If your homeowners insurance dropped you, understand the reasons by contacting your previous insurer and requesting a CLUE report. Then, address any issues and shop around for new coverage. You may consider a FAIR Plan if traditional insurers won't cover you.
Yes, filing multiple claims in a short period can result in your insurer dropping your policy. It's often better to handle minor repairs yourself to avoid exceeding acceptable claim limits.
To avoid being dropped, pay your premiums on time, limit the number of claims you file, maintain your property, provide accurate information and communicate openly with your insurer about any significant changes.
Yes, some insurers consider your credit score when assessing risk. Significant changes in your credit score can lead to policy adjustments or cancellations.
Nonrenewal means your insurer has decided not to renew your policy at the end of its term, while cancellation can occur at any time during the policy term. Both situations require you to seek new coverage.
MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay.
Homeowner Profile
For our analysis, we created a sample homeowner profile with the following characteristics:
Homeowners Insurance Coverage Details
Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:
We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
