Homeowners insurance companies can cancel or not renew your policy for missed payments, excessive claims, property risks or fraud. Insurers regularly evaluate risk and drop coverage when it's no longer viable. You'll usually get written notice, but any coverage gap leaves your home financially vulnerable.
Can Homeowners Insurance Drop You?
Updated: January 9, 2026
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Key Takeaways
Homeowners insurance providers can 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 raises future premiums and limits your coverage options with other insurers.
If you're dropped, identify the cause, fix the issue and shop for new coverage to avoid gaps in protection.
Can Homeowners Insurance Cancel Your Policy?
Why Would a Home Insurance Company Drop You?
Insurers drop coverage for these reasons:
You Missed Premium Payments
Insurers drop policyholders who routinely miss payments. On-time payments maintain your policy and ensure continuous coverage. Multiple missed payments signal financial instability and higher risk.
You Have Major Changes to Your Property's Risk
Major property changes like adding a pool or neglecting safety measures can trigger cancellation. These updates increase accident and damage risk, prompting coverage reviews. Inform your insurer of modifications and confirm they meet policy requirements.
You Have Fraudulent Claims
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.
You Live in a High-Risk Location
Living in an area prone to natural disasters like wildfires, floods or hurricanes can put your coverage at risk. If risk increases because of climate trends or changes in local infrastructure, insurers sometimes pull out of the area or cancel individual policies.
You Use Your Property for Business Purposes (Without Authorization)
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.
Can Homeowners Insurance Drop You After a Claim?
Homeowners insurance can drop you after a claim if you're considered a higher risk. The decision hinges on the claim's nature and frequency. Insurers cancel policies when they anticipate future claims affecting their financial stability. Your insurer may drop you after a claim for:
Filing multiple claims in a short period signals high risk to insurers. Your insurance may drop you when claim frequency indicates a problem property. Handle minor repairs yourself rather than filing claims.
Large or expensive claims can trigger policy cancellation. Insurers see them as indicators of future high costs and reduce risk by dropping coverage.
HOW MANY CLAIMS BEFORE HOME INSURANCE DROPS YOU?
No exact limit exists, but filing two claims within three to five years spikes your premiums. Three or more claims lead many insurers to cancel or not renew your policy. Save claims for major damage and pay for smaller repairs yourself.
What’s the Difference Between a Canceled and Non-Renewed Home Insurance Policy?
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 to 30 days (varies by state and reason) | 30 to 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 |
What Happens After Homeowners Insurance Is Canceled?
Being dropped makes you a higher risk to insurers, leading to higher premiums, fewer coverage options and stricter policy terms.
Higher Premiums
Insurers may charge higher premiums if you've been dropped. Shopping around and comparing home insurance quotes will help you find the best rates.
Limited Coverage Options
Being dropped can limit the number of insurance providers willing to offer you a policy.
Stricter Terms and Conditions
New insurers might impose stricter terms and conditions on your policy after you've been dropped.
Potential Lapses in Coverage
If you struggle to find a new policy quickly, you risk a lapse in coverage.
Lender-Placed Insurance Risk
If you have a mortgage and don't replace your coverage quickly, your lender will purchase force-placed insurance on your behalf. This coverage costs two to three times more than standard homeowners insurance and offers minimal protection. The lender adds this cost to your monthly mortgage payment, and you lose control over coverage terms and limits. Replace your policy immediately to avoid these expensive forced premiums.
Can You Get a Refund if Your Homeowners Insurance Is Canceled?
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.
If you cancel the policy, some insurers charge a short-rate fee, which slightly reduces your refund.
Will a Canceled Homeowners Policy Affect My Credit Score?
It won’t directly affect your credit score, since insurers don’t report cancellations to credit bureaus. If 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. Always settle any remaining balance with your insurer, even if your policy is no longer active, to keep your credit score clean and home insurance affordable.
What to Do if Your Homeowners Insurance Provider Drops You
Contact your insurer to understand why you were canceled. The best home insurance providers will communicate the issue right away.
In some cases, like missed payments or maintenance issues, you can appeal the decision or request reinstatement by fixing the problem and providing documentation.
How to Get Homeowners Insurance After Being Dropped
Follow these steps to get new homeowners insurance after being dropped.
- 1Identify the Causes
Find out why your insurer canceled your policy.
- 2Contact Your Former Insurer
Contact your insurer to see if you can address the issue and have your policy reinstated.
- 3Request a CLUE Report
Request a Comprehensive Loss Underwriting Exchange (CLUE) report. It shows insurers your claims history.
- 4Shop Around for New Insurance
If reinstatement isn't possible, compare homeowners insurance quotes from multiple providers.
- 5Apply for a New Policy and Provide Accurate Information
When applying for new homeowners insurance, provide accurate and complete information.
What to Do if You Still Can’t Get Homeowners Insurance
A Fair Access to Insurance Requirements (FAIR) Plan is an option if traditional homeowners insurance providers can't cover you.
FAIR Plans are state-run programs supported by taxpayers and commercial insurance carriers. They operate differently from traditional insurers, using shared market systems that spread risk among several companies.
These plans provide only basic protection, often limited to the dwelling and personal property on a named perils basis. You may have little or no coverage for liability, medical expenses or loss of use. Still, a FAIR Plan can offer essential protection when no other insurance options are 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:
How to Prevent Being Dropped by Your Home Insurance
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 | Pay your insurance premiums by the due date to avoid cancellation. Set up automatic payments to ensure you don't miss payments. |
Limit Claims | File claims only for major damage and handle minor repairs yourself. Frequent claims signal higher risk, increasing termination likelihood. |
Maintain Your Property | Inspect and maintain your property regularly to prevent issues. Address hazards and keep your home in good condition to reduce accident and damage risk. |
Provide Accurate Information | Provide truthful and complete information when applying for or updating your policy. Misrepresentation or inaccuracies lead to cancellation when discovered. |
Communicate With Your Insurer | Communicate openly with your insurance provider. Inform them of property or circumstance changes to keep your policy valid and appropriate. |
Can an Insurance Company Cancel Your Homeowners Policy: Bottom Line
Homeowners insurance companies can cancel or not renew your policy for missed payments, frequent claims or risk changes. If you're dropped, act quickly: fix the issue, compare quotes and secure new coverage to protect your home and finances.
Home Insurance Cancellation: FAQ
We've compiled a list of frequently asked questions.
My homeowners insurance dropped me, what do I do?
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.
Will filing too many claims cause your homeowners insurance to drop you?
Yes, filing multiple claims in a short period can result in your insurer dropping your policy.
How can you avoid being dropped by your homeowners insurance provider?
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.
Can your insurance be dropped if your credit score changes?
Yes, some insurers consider your credit score when assessing risk.
What is a nonrenewal, and how is it different from cancellation?
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.
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About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in 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!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.