If your homeowner’s policy has been canceled, you need to find alternatives quickly. If your property has a mortgage, your lender will likely impose expensive insurance on you. It’s also important to have coverage in place just in case of a catastrophic event such as a fire.
Reinstating your policy means taking up the same coverage under the same conditions from your old insurance company. Depending on why your policy was canceled, this may be difficult. If it was canceled for non-payment, you have automatically become a higher-risk customer, and at the best you will need to negotiate new terms with your insurer. At worst, that company can refuse to do business with you. If you canceled the policy yourself for legitimate reasons – perhaps you thought you were going to move, but plans fell through -- you may get a more sympathetic hearing from your company.
You can opt to continue with insurance that your lender imposes on the property. Mortgage companies do this after a cancellation to insure their own risk should there be a catastrophic loss. You’ll be paying the premiums, however, and it won’t be cheap. Some stop-loss policies of this kind can be up to four times as expensive as insurance you take out on your own.
You can try to negotiate a new policy with a new insurer. Again, depending on the reason for your previous cancellation, you may find that you have to shop around for a while. Many insurers will regard you as a higher risk because of your termination, and they will be able to find out about it because of a database in which insurance companies share such information. Your best option may be to work with an insurance agent who is experienced in negotiating difficult circumstances such as yours.
Many states have “last resort” insurance plans offered to people who cannot get coverage in the regular market. These are subsidized by the industry itself and usually called FAIR plans. Talk to your state’s insurance department about what’s available to you. Such plans usually offer limited coverage and may be more expensive than the traditional market.