If your home insurance is cancelled by your insurance provider

If you have your home insurance cancelled, or, as is more likely, you find that your insurance provider refuses to quote at renewal time, it can be very distressing not to mention time consuming.

Why would they do that? Are there any further implications and are there ways of avoiding this happening in the first place? Here we’ll explore the issue of home insurance cancellation and give you the answers to those questions.

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Why might your insurance provider cancel your policy?

First of all, we should acknowledge that your home insurance provider isn’t under any obligation to continue to cover you when it comes to renewal.

In a similar way to you being able to shop around for your cover, insurance providers will take a view on the risk that you or your property poses. Having done that, some might decline to quote for your cover, and that includes your existing insurance provider.

  • Cancellation due to claims history

One reason why your home insurance provider might cancel your policy when it comes to renewal, is because of your claims history. Insurance provider have different internal rules which they use to guide them on when to, and when not to quote. The following are some examples of why they might decide not to renew based on your claims history:

  1. Subsidence. Some insurance provider simply won’t insure properties that have previously had subsidence issues. Others might increase your premium significantly or impose a higher excess
  2. A claims record that includes multiple claims over a period of a few years could be enough for your insurance provider to decide they no longer wish to cover you.
  3. A single high value claim might in some situations be enough to put some insurance provider off renewing your insurance or even a claim within the first year of your policy.
  • Disclosure issues.

An insurance provider might refuse to renew your insurance if you’ve failed to disclose something that they consider material if it comes out at the point when you make a claim and they find some information in CUE (Claims and Underwriting Exchange). Say for example you’d had previous claims in the past but didn’t tell the insurance provider when you took out the policy, or if you hadn’t declared any non-spent criminal convictions.

However, in most cases unless your failure to disclose something happens during the renewal period, this may be more likely to become a mid-term cancellation (MTC).

Non-disclosure issues are likely to result in either your policy being invalidated, which may mean you have to fork out for any repairs yourself. The insurance provider may also add an endorsement to the policy to impose special terms, such as an increased excess for a certain problem if it’s resulted in numerous claims – e.g. escape of water.

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Does having a policy cancelled affect your ability to get a new policy?

The bad news is that having a policy cancelled or declined can make life a lot harder when it comes to finding a new policy.

How much harder really depends on the reason for the cancellation as well as your own personal circumstances.

You may be thinking “well, they won’t know I’ve been declined” but think again. First of all, you may well be asked a direct question on your insurance application. Answering this inaccurately could make your situation even worse.

Additionally, insurance provider routinely share information about your policies and claims histories on a shared database called CUE (Claims and Underwriting Exchange.) That means it’s very unlikely any deceit won’t be discovered.

Unfortunately, disclosing that you’ve had a company turn down your insurance policy could cause other insurance providers simply to follow suit. Even if your issue was many years ago, and even if the situation is now resolved, you could still find it harder to find insurance.

In some cases, it might be other potential insurance providers who simply decline to quote, leaving you with higher premiums with your existing insurance provider.

How to avoid getting your policy cancelled

Of course sometimes there’s nothing you can do. If the ground beneath your house decides to move giving you subsidence issues, that’s not something you could have done an awful lot about!

However, there is something you can do around disclosure. Always make sure you fill in any insurance application fully and honestly. Trying to save a few quid on your policy by neglecting to mention something you should have done, could end up costing you a lot more in the long run.

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Shopping around

Shopping around is always a good idea when it comes to insurance as often insurance provider save their best deals for new customers. If you’ve had a policy cancelled or declined this could make the process more difficult, but not impossible.

Using a comparison site such as ours makes this process really simple. All you have to do is enter your details here at comparethemarket.com and we’ll show you instantly who will insure you, and how much it would cost.

Try it today.

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