Most insurance companies will not non-renew a customer after one home insurance claim. So before we begin, let’s talk about insurance companies to gain a better understanding on risk mitigation. Insurance companies like to mitigate as much foreseeable risk as possible. They do this in an effort to reduce future home insurance claim activity.
For Example, let’s say that you’re in the market for to purchase a home. You find a home you love, but it’s a home built in the 70’s. Your insurance company will most likely ask you to obtain a 4 point inspection to ensure the HVAC, plumbing, electric and roof are in good order and not in need of repair. If there are areas of disrepair noted, such as a plumbing leak, the insurance carrier will require the leak be fixed prior to issuing a policy. The reason? It is now foreseeable that the leak has the potential to cause a future home insurance claim.
So how is this related to my claim?
Ok, now let’s change course here a bit. Let’s assume that you’re living in a home and you have pipe break. Let’s assume that the pipe breakage causes $10,000 in damage and the insurance company gave you a check for $9000 because you have a $1000 deductible. The insurance company will give you a reasonable amount of time to get your home back in order. Then they’ll require some type of documentation to show the repairs have been completed. This documentation could be photos, invoices, work orders, etc.
However, if the insurance company doesn’t receive documentation reflecting the completion of the repairs, they will likely send you a non-renewal notice.
Just like how the insurance company will not generally issue a policy with existing damage to the home; they’ll also not generally renew a policy with existing damage to the home.
So what should you do?
Gather all of the documentation showing the repairs have been completed and send it to your insurance company, or to your agent, straightaway and request a renewal offer. Many times, the insurance company sent notices requesting this information prior to the non-renewal. But in all of the craziness of the claim, and the vast amount of paperwork associated with the claim, these notices get missed. Nevertheless, if you only have one home insurance claim and provide the documentation showing the repairs, the carrier will most likely rescind the non-renewal notice and you’ll be good to go!
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