Don’t Click “Ignore” on Homeowners’ Insurance Policy Renewals: Here’s Why

You can generally expect to receive a notice of renewal 30 days prior to the “maturity” date of your policy (i.e, at the end of your policy period.) If you choose to work with a broker, your broker will send you this notice instead of your insurance provider. If you opt to ignore this notice or do not reply, your home insurance policy will automatically renew.

If you have opted for auto-renewal, great! This can ensure a consistent insurance history and saves you the hassle of having to go through the whole process of purchasing a new policy all over again. It just seems like the easiest, most pain-free option, especially if you are one hundred percent happy with your premiums and have not made any significant changes to your home in the last little while.

However, you might take this time to make some changes to your coverage. If you have built an addition on your home, renovated, or made any other changes, it’s not a bad idea to ensure that these are accurately reflected in your policy so that your home is insured for its total replacement value. This is critical so as not to later encounter a situation where these upgrades have been damaged and you are unable to make a claim.

Insurance-qualifying events

An insurance-qualifying event is an event, circumstances, or modification you have made in your life or to your physical home that may constitute a phone call to your insurance broker so that you can review your policy. The following list is examples of insurance-qualifying events:

• High-value purchases, i.e. collectibles, jewelry, antiques, etc.
• Repairs to your home
• Security system installations or deactivations
• The addition of a pool or hot tub
• Upgraded heating, ventilation, electrical, or plumbing systems
• The adoption or purchase of new pets
• Renting out a portion of your home to tenants
• Switching to work from home
• New people are living at home

As you can see, there are numerous situations or reasons why you might want to make modifications to your existing insurance policy. If you have experienced an insurance-qualifying event over your most recent policy period, discuss it with your insurance provider or broker. They can help you determine what additional coverage, or coverage modifications, may best meet your needs.

Should you modify, renew, or cancel your home insurance altogether?

Your life circumstances can change drastically in an annual or semi-annual period (depending on the length of your policy period.) As mentioned previously, if you made some modifications to your home, have a renovation plan, or recently started renting out that guest room to some university students, you might choose to make modifications.

You or your insurance provider both have the right to cancel your policy. You could be charged a penalty if you choose to cancel your policy for whatever reason, especially earlier in the policy term. Generally, the earlier you cancel, the higher your penalty. Your insurance provider can also cancel your policy for any of the following reasons:

• Non-payment (the most common reason for insurance cancellations)
• Severe change in risk
• Too many claims
• Your insurance provider stops serving your area or selling home insurance
• Fraud
• You switched providers and didn’t tell your previous insurer

You also have the option to let your home insurance auto-renew, but this can mean losing out on some serious savings. Check first to see if your insurance rates have changed come renewal time. If they have gone up, call your insurance provider or broker. They may have increased because:

• You have added more coverage
• You recently made a claim
• Your credit score has decreased
• Your home is aging
• External factors – like climate change and crime rates – have increased
• Higher construction material cost

Whatever the reason may be, discuss it with your broker and ask questions. You may be eligible for a discount you weren’t already aware of. They can help you to remove any coverage you may not need. If you are not eligible for any discounts and you don’t have any excess coverage, consider raising your deductible. This can lower your premium.

You can expect to receive your renewal notice 30 days before your policy’s term is up, so keep that timeframe in mind if you want to make changes. You can also ask your broker to help you shop around to see if you’re eligible for a cheaper deal.