How Can I Obtain Homeowners Insurance If the Insurance Has Lapsed 6 Months?

Reinstate your homeowners insurance to protect from financial loss.

Homeowners purchase insurance to cover serious losses, such as fire, earthquake or other damages. The cost of insurance varies based on your location. People struggling with financial hardship may let a homeowners insurance policy lapse. Lapses in homeowners insurance can make getting a new policy more expensive, so it's important to get reinstated right away. Understanding your options during a homeowners insurance lapse will get you back on track.

Instructions

1. Contact your insurance company and ask to reinstate the insurance policy immediately. Typically, an insurance company can take a credit card payment over the phone for the fastest reinstatement.

2. Shop around for a new policy. If your current homeowners insurance company won't reinstate your policy, you will need to find a new policy. Contact the National Association of Professional Insurance to find an agent in your area. Since your policy has lapsed for over 45 days, premiums for a new policy are considered "high risk." This will make your premiums more expensive.

3. Ask the insurance company to fax you proof of reinstatement or proof of the new policy purchase. This document will confirm that you have a policy in force on the property.

4. Remove your forced placed insurance. If you have a mortgage on your home, the lender will "force place" insurance on the property. Forced placed insurance is very expensive. Fax your lender proof of homeowner's insurance and ask for the force-placed insurance to be removed right away.

5. Watch your mortgage statements. When the lender "force places" insurance, the insurance premium is added to your monthly mortgage payment. This significantly increases your monthly payment. Watch your mortgage statement to ensure that this extra charge is removed moving forward.

Tips & Warnings

• Ask your lender for a refund on forced place insurance. For example, if you reinstate your policy in January, but the lender continues to charge you premiums until March, you may be entitled to a refund for premiums paid January through March. Fax a copy of when the new policy started to the lender to apply for a refund.

• If you don't have a mortgage on your home (you own the home outright), "forced placed" insurance won't be placed on your home. This leaves your home without any homeowner's insurance coverage, which is devastating in the event of disaster. Reinstate your policy right away.

References

• CNN Money: Getting Homeowners Insurance
• "The Seattle Times;" Make it a Policy to Understand Homeowner Coverage; Elizabeth Rhodes; June 2005
• Brokeroutpost.com: Homeowners Insurance

Resources

• National Association of Professional Insurance Agents