Can an insurance company drop you? The short and scary answer is yes, they most definitely can, but it’s actually pretty rare. When insurance companies do drop policies, it usually comes in the form of a decision not to renew, and you’ll receive a letter explaining why. Here are a few of the reasons why an insurance company can drop your coverage, and what you can do about it.
You Missed a Payment
Perhaps the most common and the most easily avoidable issue is missed payments. If you don’t pay, or if you have a history of missing payments, your insurance company can discontinue your policy. You’ll most likely get a letter from your insurance company warning you of the missed payment, saying if you don’t pay it by a specific date, you’ll lose your coverage.
You’ve Suffered Too Many Losses
If the insurance company has had to cover several expensive claims on your behalf, it becomes increasingly difficult to get insured. Every insurance company is a little different, but they all have their breaking points. It may not seem fair, but it is a business, after all. If you claim a lot of losses within a short period, you might want to keep an eye out for new insurance companies. What they shouldn’t do is skip out on your claim while it is in process.
Your State or Region Has Been Determined Too Risky or Expensive to Cover
Another practice we sometimes see with insurance companies is withdrawing completely from a particular state or area because it has become too expensive for them to offer coverage there anymore. For instance, it’s feasible that some of the Hurricane Harvey insurance companies might decide to withdraw from the areas likely to suffer hurricanes. Likewise, damage from Hurricane Irma could rack up a bill that would make it difficult to justify a smaller insurance company continuing to provide coverage in that area.
What to Do if Your Insurance Company Drops Your Coverage
If you get a letter informing you that your insurance company has dropped or may drop your coverage, the first thing you should remember is not to panic. Instead, call your insurance company to make sure the letter isn’t a mistake, and to see if there’s anything you can do. For example, if you’re behind on payments, you may just have to catch up. If you’re in the middle of a claim when you get the letter, or if you feel you’ve been unfairly dropped, call Rapid
Public Adjusters. With our experience navigating the insurance claim labyrinth, we can help you maximize your claim and ensure that you aren’t unfairly or illegally dropped.