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What can you do if your home insurance provider won't renew your policy?

What can you do if your home insurance provider won't renew your policy?

When you come to renew your policy, finding out that your home insurance provider won’t give you a quote can be concerning.

Understanding why this sometimes happens and knowing what the potential implications might be can help. See if it’s possible to avoid this situation in the first place and what to do if it happens to you.

Chris King
From the Home team
minute read
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Posted 19 DECEMBER 2019

Why won’t my insurance provider renew my home insurance policy?

What many homeowners don’t know is that home insurance providers aren’t under any legal obligation to continue to cover you when it comes to renewal.

All insurance providers – including your existing one – take a view on the risk that you or your property poses. And if they feel the risk is too great, they might decline to quote for your cover. Some of the biggest risks, from a provider’s viewpoint, are:

1. Extensive claims history

Insurance providers have different internal rules that determine when, and when not, to quote. A claims record showing multiple claims over a few years, or a single high-value payout, could be enough for your provider to decide they no longer wish to cover you.

2. Subsidence

Some insurance providers won’t insure properties that have previously had subsidence issues. Others might charge you a higher premium, or impose a higher excess.

3. Disclosure issues

If you’ve failed to disclose something that an insurance provider considers pivotal – for example, you’d had previous claims but didn’t tell them when you took out the policy, or you hadn’t declared you have a lodger living with you – they might decline to continue your cover.

It’s worth noting that non-disclosure can invalidate your policy, so you should keep your insurance provider updated of any changes. For example, if you have an extension and your property gets bigger, or you start to run a business from home.

4. A change in your circumstances

If you’ve had a conviction during the year, changed your job or had a change in your financial circumstances, an insurance provider may no longer want to insure you because they consider you a higher risk.

5. The insurance provider no longer offers a type of cover

Insurance providers can change their minds about what types of risk they want to insure. For example, some providers no longer offer flood cover following the impact of major floods. Others may have once insured a particular type of non-standard home but no longer wish to, based on their claims experience.

Sometimes after a merger or takeover, an insurance provider may realign what cover it offers too.

Insurance providers are increasingly using sophisticated data to assess risk to be able to more accurately predict likely claims, and because of this may decline to insure you. But not all providers interpret the data in the same way, so just because you’ve been turned down by one doesn't mean another will do the same.

A provider might not always decline your renewal or cancel your policy, but they might insist on adding an endorsement for them to continue to offer you cover. Endorsements are special terms imposed on your policy. This might mean an increased excess for situations that have resulted in numerous claims – for example, escape of water. They could even exclude certain elements of cover, like theft if there’s been a significant increase in break-ins in your area.

What can I do if my home insurance provider won't renew my insurance policy?

This largely depends on why your provider plans to cancel your insurance. Often, you’ll be able to negotiate with them and make the changes necessary to meet their requirements for renewal. This isn’t always the case though.

If, despite your efforts, your current insurance provider still declines to renew your policy, all’s not lost. Different providers have different underwriting guidelines, and some even offer specialist home insurance that might be better suited to your circumstances. For example, home insurance for non-standard construction houses or home insurance for people with criminal convictions.

The key to finding a new insurance provider and getting a fair premium is to compare quotes. Luckily, Compare the Market can help you with that.

Does having a policy renewal refused affect your ability to get a new policy?

It’s quite likely to. Having a policy cancelled or declined by your insurance provider can make it tricky to find one with a new provider. It really depends on the reason for the cancellation, as well as your personal circumstances.

And if you’re considering not declaring the fact that you’ve been declined for cover to a potential insurance provider, this could make your situation worse.

Insurance providers routinely share information about policies and claims histories on a shared database called CUE (Claims and Underwriting Exchange). This means that any hidden details could come to light at any time.

So it's much better to be upfront about what has happened, even if it means that your policy renewal may be a bit more expensive, because you'll still be covered if something goes wrong.

How can I avoid my home insurance provider refusing to renew my policy?

If you pay for your insurance monthly, make sure all your payments are made in full and on time, so non-payment or late payment can't be used as a reason not to renew.

But sometimes there’s nothing you can do. If your insurance provider changes the type of homes they want to insure, it’s outside of your control.

However, disclosure issues are something that can be avoided, by being accurate and honest on every insurance application. Trying to save a few pounds on your policy by neglecting to mention something you should’ve done, could end up costing you a lot more in the long run.

Finding a new insurance provider after your renewal has been refused

Shopping around is a good idea when it comes to insurance, whether you’ve had a policy renewal refused or not.

Start a quote with us and we can make the process a whole lot simpler. Just tell us a few details about yourself and we’ll find you a range of quotes from insurance providers who’re happy to take you on.

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