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:
- 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
- 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.
- 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.
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.