How to Get Homeowners Insurance After a Lapse in Coverage
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A lapse in your homeowners insurance can happen for many reasons, such as forgetting to make a payment. And while at first glance it may not seem like a big issue, the truth is that it will most likely result in a higher premium, and it also leaves you at risk during the lapsed time period. If you want to get your coverage back after a lapse, here’s what you need to do.
1. Contact Your Insurance Company
The first thing you’ll want to do is contact your insurance company; the sooner you do this, the better. You’ll want to explain the reasons why you lapsed in your payment, whether it is because you forgot to pay on time or whether something else was going on in your life that prevented you from paying.
Most likely, your insurance company will agree to reinstate your insurance policy but with a higher premium, since a lapse in payment is seen as a “risk.” You don’t have to agree to this increase immediately, but can instead tell the agent you’ll think about it and contact them soon. This will buy you some time to explore other companies and their plans to ensure that the quote you’re getting is a fair one. (Note: If your lapse in payment happens to be because of circumstances related to the COVID-19 pandemic, most companies are working with policyholders to come up with payment solutions.)
2. Contact Other Companies
Now is the time to do some research. You should already be familiar with your previous plan and what it covered. With your new premium in mind, explore other companies’ options to see if you can find similar coverage at a lower price.
If you do happen to find a better offer, you have two options: switch insurance companies or contact your original provider and discuss these new plans you found. They might be willing to match these offers depending on company policy.
How to Prevent a Lapse
If you’ve already had a lapse in coverage, it’s not the end of the world. While you might have to pay a higher price for a while, eventually, your premiums should go down again. However, to ensure this, you want to make sure you don’t make the same mistake again. Here are some ways to prevent another lapse in coverage.
Do not forget to pay your premiums: It should be obvious, but life happens, and sometimes people forget to pay their premiums on time. Most companies offer a 30-day grace period for you to make a payment, but a good way to make sure you don’t forget would be to set up an alarm on your phone or maybe go paperless; this way you’ll get your insurance bills through email.
Avoid changes in risks: Insurance companies can cancel your policy if your risk changes. This can refer to small things like getting a new dog, or more important things like living in an area that recently suffered a natural disaster. So, make sure to read through your policy carefully.
Don’t lie on your application: Lying about your living conditions is never a good idea. There’s a good chance you’ll get caught during an inspection; this will lead to a policy cancellation.
If You Have a Mortgage
If you happen to have a lapse in coverage while paying a mortgage, your mortgage company will be notified. Since being insured is a requirement for these companies, what will follow is a force-placed insurance plan. This means that your mortgage company will purchase an insurance plan for you and include the cost of it in your monthly mortgage payments (this will, of course, raise the amount you pay monthly).
When your mortgage company chooses a plan for you, it will most likely be more expensive than if you were to pick the plan yourself. So, as soon as you select a new insurance plan after a lapse, call your mortgage company and let them know so that they stop any plans for a forced-placed insurance plan.