How Much Notice to Cancel Homeowner's Insurance?

Insurers have more rules to follow than homeowners do when it comes to canceling homeowner's insurance policies due to state regulations. However, insurers also are required to warn homeowners when their policies aren't going to be renewed. A non-renewal isn't the same as a cancellation, but it has a similar outcome because it leaves a homeowner without coverage.

Cancellation Policies

According to the National Association of Insurance Commissioners, customers can cancel their homeowner's insurance policies for any reason without giving advance notice to their insurers. Insurance companies generally can cancel new homeowners policies for up to 60 days after they take effect. After 60 days, the NAIC indicates that insurers generally can cancel a person's policy only for nonpayment. However, insurers also can cancel coverage if they discover that policyholders provided false information on their original applications.

State Rules

Your insurer may give you a partial refund for any payments you made on your policy if you cancel it early without notice. However, states usually require insurance companies to give policyholders advance notice before canceling their policies. That includes situations in which policyholders haven't made their required payments. In such cases, New York even prohibits the cancellation of a homeowner's policy if the policyholder sends the required payment to the insurer within 15 days of the mailing of the cancellation notice. You can find out your state's rules for canceling homeowners policies through the NAIC website, which includes a list of state insurance departments.

Renewals

People also may lose their homeowner's policy coverage through non-renewals that homeowners or insurers initiate. Many insurance companies automatically renew a homeowner's policy before it expires, unless the policyholder declines a renewal. Again, homeowners generally aren't required to give insurers advance notice if they choose not to renew their policy, but they should do this before the renewal takes effect. Oregon and other states require insurers to give homeowners 30 days' notice if their policies aren't going to be renewed. That time span generally gives people enough time to find a new insurance company before their current coverage expires.

Unlicensed Insurers

The NAIC warns consumers that standard cancellation policies may not apply if they deal with an unlicensed insurer. According to the NAIC, it's illegal for unlicensed agents to sell insurance. An unlicensed agent might not pay out on any claims you file, inform you about a cancellation or refund any of your payments if you cancel your homeowner's policy. Texas and other state insurance department websites allow consumers to enter the names of insurance agents to check whether they have a license to operate in the state.

References

• National Association of Insurance Commissioners: A Consumer's Guide to Home Insurance (PDF)
• Oregon Insurance Information Council: Oregon Homeowner Bill of Rights
• New York State Insurance Department: Homeowners Insurance Resource Center
• Texas Insurance Department: Insurance Licensing Search and Renewal

Resources

• National Association of Insurance Commissioners: State Insurance Departments