What to do if you are denied home insurance?
There may be occasions where your current provider is unable to renew your home insurance, or a new insurer has turned you down. It is important to understand the circumstances that may have caused this to happen and how to prevent them from happening in the future.
What does refused insurance mean?
If an insurance provider considers you to be high risk, they are within their rights to refuse you a policy. If you’re denied home insurance by one insurer, don’t panic, as other providers have different guidelines and may have a solution to suit you.
Below we’ll explain the reasons why you might be refused home insurance and ways in which you can reduce the risk.
Reasons why you may be denied home insurance
When you apply for home insurance coverage, potential providers will look at several risk factors before offering you a quote. If you fail to meet the criteria, then you may have to look elsewhere for a home insurance policy.
It is important to note, however, that different providers have different underwriting rules, with some even offering specialist home insurance that might be better suited to your circumstances.
Below are some of the reasons why you may get turned down for home insurance:
- Multiple claims history. If you have claimed on your insurance a number of times in a short space of time, or had a single high-value disbursement, then insurers may be reluctant to offer you a home insurance policy. And, if they do, it is likely to come with increased premiums.
- Condition and age of property. If your property has been declared as having subsidence issues, then chances are you are likely to make a claim in the future. Some houses that are really old may also be considered a risk as they are likely to have older electrical and plumbing systems. Therefore, insurers are often unwilling to protect your home or will impose higher excesses to cover the cost.
- Failure to disclose the truth. If you kept back vital information or have been economical with the truth, then this could have a detrimental effect on your insurance and can even invalidate your policy.
- Change in circumstances. If you have obtained a criminal conviction, switched to a different career or had a change in financial circumstances, then these could all affect your insurance offers.
- An unfavourable credit scores. If you have previously been late or defaulted on credit payments, then this is a red flag to providers to steer clear of offering you insurance. Also, if you have missed monthly payments on your previous policies or not paid on time then this can be a valid reason why your insurer will not offer to renew.
- Situations outside of your control. Sometimes insurers change, offer different policies or are simply unable to provide you with the insurance you are looking for. Alternatively, the environment around you could have changed through no fault of your own e.g./living in an area which has recently flooded or had a spate of crime, and this may prevent insurers wanting to take your property on.
The more honest you can be with disclosing information, the more likely you are to find the right home insurance policy for you – even if it means paying a bit more should something go wrong.
What to do if you are refused home insurance?
The first thing you should do if you are refused home insurance is to find out the reasons why, just in case it is due to an error on a form or miscommunication. Chances are, however, that you have been deemed as high risk.
In this situation, you could see if there is any chance for negotiation with your current provider, in order to meet their home insurance requirements. If you are still ineligible for standard home insurance don’t despair, as there are a number of companies specialising in high-risk homeowner policies. You may just have to accept that there are higher premiums to pay.
How do home insurance claims affect future premiums?
Most people worry that having claimed on their house insurance in the past, that it will make them less desirable for future insurers. But are we right to be concerned?
Unfortunately, the answer is yes! Filing a home insurance claim is likely to raise the cost of premiums on future policies. By how much, however, really depends on the cost of the initial claim and the circumstances surrounding it, although one off claims tend to raise premiums by around 10-15%. And, the more claims you make the higher the premiums you will pay year on year.
Protecting your no claims discount will help to lower the cost, however it will not stop policy prices from rising. This is because you are paying to protect your discounted rate and not the insurance premium itself, so although the discount will still apply, the base figure will be higher to begin with. For these reasons, it is always worth considering the impact to future policies when making small claims on your existing home insurance.
And it’s not just claims that you have personally made, but those made from previous owners on your current property can affect you getting home insurance too. Historical claims are logged in a shared database for all insurance providers to see, dating back to the last seven years. Therefore, if claims have been made on your house previously, even if you were not living there at the time, insurers may worry that your house has fundamental issues that may mean they have to pay out in the future. This is especially true for issues such as water damage which can remain hidden for long periods of time.
House and Home Insurance with Jersey Mutual
At Jersey Mutual we want to help you get the best quote for your house and home insurance. This is why we treat everyone as an individual and tailor our policies to suit your circumstances and needs.
As the Jersey’s leading independent insurance provider, we as exclusively owned by our members, and have been working hard to stabilise premiums, increase cover and improve our service to you.
Our local knowledge and considerable financial strength enable us to provide key insurance services to help our members find the right cover for their property and possessions. This includes:
- Your house and home insurance policy being held directly with us – no brokers or third party involvement
- Senior staff members handling your claim
- No administration fees and no agent commissions
- No phone queues, stalling tactics or delays
- Real people who care
If you would like to learn more about our house and home insurance services and how they can benefit you, please call to speak to a member of our team.