The most common question I am asked when someone finds out I am a public adjuster is; “Will my insurance company drop me if I file a claim?”
Some clarification is necessary. First, there is a difference between being “dropped” or cancelled and being non-renewed. For a carrier to cancel a policy, there must be cause such as non-payment of premium or material misrepresentation (something claimed in the application that was untrue) or a change in risk with no notification to the carrier (adding a swimming pool or getting a dangerous dog breed). Cancellation of the policy for these reasons still require written notice, but cancellation may be as soon as 10 days from the written notice for non-payment or 45 days for misrepresentation.
Florida Statute 627.4133 states:
“After the policy has been in effect for 90 days, no such policy shall be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy”
This means that the insurance company can’t cancel your policy after it has been valid for 90 days for any other reasons than stated above. However, they can non-renew your policy, which means that your policy will not be re-issued on the next renewal date.
If your policy is non-renewed, there must be a reason. However, since any business has the right to choose who they wish to do business with, the reasons are varied and broad. Some common reasons for non-renewal are:
Multiple claims can be a reason for non-renewal. However, Florida statute states that “Claims on property insurance policies that are the result of an act of God may not be used as a cause for cancellation or nonrenewal, unless the insurer can demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary as requested by the insurer to prevent recurrence of damage to the insured property.” Additionally, “A single claim on a property insurance policy which is the result of water damage may not be used as the sole cause for cancellation or nonrenewal unless the insurer can demonstrate that the insured has failed to take action reasonably requested by the insurer to prevent a future similar occurrence of damage to the insured property.
The age of your home or roof can also be used as a reason for non-renewal. Many companies are non-renewing policies stating that the roof is over 15 years old and must be replaced prior to renewal. They are forcing homeowners to pay out of pocket to replace their roof even if there are no roof issues, leaks or missing shingles. They are making you pay to replace something that isn’t broken and charging you the same premium to insure your home which is now significantly better (for them) because it has a new roof.
A home inspection showing fire hazards or negligence that could result in damage and possible claims.
Flood zone or wind map changes could be cause for non-renewal if your home is in a high hazard zone.
Hazardous pets include many dog breeds that are deemed dangerous and, if you don’t disclose them on your application or get a new dog and don’t alert your carrier, you could be cancelled or non-renewed.
The good news is that, once your policy is over 90 days old, your insurance company must give at least 90 days notice to non-renew your policy and you have until the policy expires. For example, if you obtained a new policy on January 1, 2022 and you receive a non-renewal notice any time after April 1, 2022, you have until January 1, 2023 to obtain a new policy. This gives you time to have the issue remedied or find another insurance company.
In my experience, it is unusual for an insurance company to non-renew a policy for one, or even two claims. However, they can non-renew for many other reasons as stated above. It benefits the insurance companies greatly to let people believe that filing a claim will get them “dropped” because less people will be likely to report a claim for fear of the possible consequences.
If you have received a non-renewal notice, call me to discuss it. We will provide a free inspection and consultation to determine if the reasons for non-renewal or cancellation are valid.
You can call or text me any time at (941) 226-9871.
Chris Varn