A non-renewal is an early notice that your insurance protection will cease on the policy expiration date and the insurance company will not continue to offer coverage beyond this date. In the sense of a true non-renewal, your coverage will continue until the expiration date. This date is important for many reasons. The first, is that you should let your current coverage continue until the end of your policy term if at all possible. We recommend starting to shop for a replacement policy 30 days prior to policy expiration. In some non-renewal cases, there will be an assumption plan in place where another company will be assuming your policy. You should have clear instructions from your Agent if your non-renewal notice comes with an assumption offer.
In Florida, non-renewals have been more and more common in recent years. The reasons can be “conditional” meaning there is a property-specific issue that once resolved may allow the policy back in good standing after being reviewed by the company’s underwriters. Another reason may be an “un-conditional non-renewal” which is usually not anything that you have or haven’t done as a consumer, but this type of non-renewal is not eligible to be reversed.
I wish insurance companies did not threaten cancellations and issue non-renewals as an initial notice of an issue, but it is required because of the time limitation imposed by multiple Florida Statutes. Insurance protection cannot and should not, be cancelled without adequate notice to the insured. Florida has many legal considerations for cancellations and non-renewals and the advance notice companies must give to their insureds if they do not intend to continue protection. Insurance companies are under strict time constraints to make their determination if they will continue to offer protection or exit the risk by cancelling coverage. For example, if a policy is in force for more than 90 days, Insurance companies are obligated to continue coverage throughout the designated term. This is to protect against leaving an insured without enough notice to secure replacement coverage, especially if the cancel or non-renewal date falls during hurricane season (June 1-November 30).
So far in 2022, Florida is continuing to experience a property insurance crisis where many insurance companies are non-renewing large blocks of their business as a means of reducing their exposure. Your non-renewal notice may list this reason as “Exposure Management.” Because of reduced capital, the company simply does not have the capacity to meet the reserve requirements for the number of policies they currently insure in the given area. To stay within financial stability requirements, the company must raise more capital, reduce their insured exposure, or in some instances they must do both.
If you receive a non-renewal notice, the first thing you should do is contact your Insurance Agent. They should be able to advise you why your policy is non-renewing, if it can be withdrawn and if so, what is required.
If the non-renewal cannot be withdrawn, coverage must be replaced with a new insurance company by 12:01 AM the day before your expiration date.
In this situation, replacing a policy is no simple task and it requires detailed personal information as well as updated property information to make sure your residence stays properly insured without a lapse in coverage. The more information you can provide, the more likely you are to secure a reasonable rate. We recommend the following tips to prepare for starting your shopping process 30 days prior to policy expiration:
- Request a copy of your most-recent Declaration Page from your Agent so you are familiar with how your home is currently insured. With recent increases in building materials, it may be appropriate to increase your coverages to ensure your home can be rebuilt after a claim or disaster.
- If your home is more than 20 years old, secure your Wind Mitigation Inspection from your Agent. If it has not been updated within the last five years, you will need to order a new one. If you would like a recommendation for local, licensed inspectors, text us at 850-244-2113!
- If your home is older than 30 years, an updated 4-Point Inspection is mandatory for new business with some markets and would be well worth the expense. Our goal is to shop your non-renewal with as many markets as possible to ensure that you are receiving the best rate. It’s possible that
An experienced, licensed Agent should advise and help you navigate the process of replacing your coverage if you receive a non-renewal notice. Be sure to use an Independent Agent that has access to more than just one company. Check out how their clients feel about them on Google, seek a “Special” form policy and ask a lot of questions. Because of the current crisis, securing protection in Florida requires due diligence. You need an Agent with access to as many markets as possible and the expertise and knowledge to lead you to the best policy for your property. At Harris Insurance, we have just that and would like to welcome you to request a quote for your Florida Property here. We will work with you one-on-one to ensure your complete satisfaction-from securing a new policy to every renewal.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
