How to Get Homeowners Insurance after a Lapse in Coverage

It’s usually easy to handle if you catch the mistake in time—just pay your bill, and the policy should be reinstated. However, if you lose your insurance for a different reason or simply don’t pay your bill before the 30-day grace period expires, your coverage will be canceled. You may find yourself having to shop for new policies with other insurance carriers.

Here’s what you need to know about a lapse in your insurance coverage.

If you’re in the market for a new insurance policy, check out Insurify! It’s an easy way to get quotes for a new homeowners insurance policy.

What Is a Lapse in Home Insurance?

A lapse in your home insurance coverage is when you are without insurance for any reason. Some of the reasons you can lose your coverage include:

• You failed to pay your insurance premiums on time. Nonpayment is a common reason for insurance lapses.

• You misrepresented yourself in your application—for example, applying for a policy with someone else’s identity.

• The condition of the home has changed, and the insurer is no longer willing to cover the risk.

• Your home is vacant. Most policies require you to notify your insurance agent if the home is vacant for 30 or more days at a time.

• You didn’t make necessary repairs to your home that the insurance company required. Your insurer can require you to make certain repairs and upgrades, like replacing part of your roof or getting protective netting for your trampoline, as a condition of getting or keeping your insurance policy.

• You’ve filed a lot of insurance claims or a few claims with a high dollar amount.

• You live in an area that recently suffered from major wildfires, flooding, or another huge natural disaster. It’s not uncommon for insurance companies to pull out of certain markets where the risk is too high.

If your coverage has lapsed, it’s very important that you act immediately to either reinstate your old policy or find a new one. During the lapsed period, your homeowners insurance isn’t covering you. You will be financially responsible for anything that happens to your home during this time, from losing a few shingles during a windstorm to a total loss from a disaster. Can you afford to rebuild your whole home out of pocket? If the answer is no, then you need to make sure your policy doesn’t lapse or find new coverage right away if it has already lapsed.

How a Lapse Affects Future Rates

If your insurance policy lapses and you aren’t able to get it reinstated, there are a few things that can happen. One is that your insurer will probably notify your mortgage company, and your lender will purchase force-placed insurance (also commonly called lender -placed coverage) to make sure their investment in your property is protected. You’ll pay your insurance payments into an escrow account as part of your mortgage payment. You don’t want to rely on force-placed insurance—it’s more expensive than a standard homeowners insurance policy and covers much less.

When you look for a new policy from a different insurer, it may be harder to get a new company to insure you. Some companies will refuse to insure your home if you have gaps in your insurance history. If you do find a new insurance company, they’re likely to charge you higher premiums because they view you as a riskier person to insure.

What to Do If You Have a Lapse

Finding new coverage immediately should be your top priority. Even if you plan to dispute the lapse with your original carrier, that process can take a long time, and it’s crucial that you have some coverage in the meantime. Start by getting insurance quotes from a few different carriers and comparing them to see who can underwrite the best policy for you.

Make sure you’re truthful during the application process, set the effective date to immediate, and make sure your mortgage lender has all the details of your new policy so you don’t end up with a force-placed policy. If your original policy is reinstated, let your mortgage lender know about that, too.

Having a hard time finding a new policy? Try contacting your state’s department of insurance. They can give you a list of assigned risk carriers (also known as residual market carriers) who specialize in underwriting insurance for people who can’t get coverage from a regular homeowners insurance company.

You can also look into a Fair Access to Insurance Requirements (FAIR) Plan. These last-resort options are for people who are high-risk and have been denied repeatedly on the private market. FAIR Plans are expensive and protect less than the coverage you’d get from a private home insurance company, but they’re much better than no homeowners insurance coverage at all.

Frequently Asked Questions

Act Now to Insure Your Home

Having homeowners insurance is one of the most important things you can do as a homeowner. It protects the huge investment you have in your home. If you don’t have a policy, you’re responsible for any losses you have from theft, fire, or natural disasters.

Always pay your premiums on time, and ask your insurer for help if you can’t pay. Letting your coverage lapse is risky and can make it harder for you to get affordable insurance in the future.

Finding a new policy that you can afford doesn’t have to be hard. Home insurance comparison tools like Insurify let you compare insurance costs from lots of top insurers.