What factors should you consider when deciding whether to cancel your home insurance policy?

When it comes to homeowners insurance, cancelling your policy is not a decision to be made lightly. There are a number of factors you should consider before making the call to your insurance company.

  • Cancellation Fee: Many insurers charge cancellation fees and this can vary depending on your insurer, so it’s important to check the terms of your policy.
  • Premium cost: Consider the premium’s price versus the coverage’s worth. If your home has decreased in value or you no longer require as much coverage, cancelling your policy may make financial sense.
  • Comfortable being not insured: You’ll need to consider the level of risk you’re comfortable with. If you’re worried about potentially being without coverage, it may be worth keeping your policy active. Your mortgagee also likely requires you have an active insurance policy in place.

What are the risks of cancelling your home insurance policy?

Cancelling your home insurance policy may seem like a temptation when you are trying to save money. However, there are several risks associated with cancelling your policy.

  • No Coverage: First, if you cancel your policy and something happens to your home, you will not receive any compensation from the insurance company. This could leave you with a huge financial burden.
  • Higher Premiums: If you cancel your policy and then decide to reinstate it later, you may have to pay higher premiums. Insurance companies typically charge higher rates for customers who have previously cancelled their policies.
  • Denied Coverage: If you cancel your policy and then try to get a new one later, you may be denied coverage altogether. Insurance companies often view customers who have cancelled their policies in the past as high-risk. As a result, they may be unwilling to offer them coverage.

How to cancel your home insurance policy?

Before cancelling your home insurance policy, first check with your mortgage company to see if they have any requirements or recommendations for cancelling your insurance. In some cases, the mortgage company may require you to maintain coverage until the loan is paid off. Next, It is always recommended to cancel your policy in writing (via email ) and send it to your insurance broker. Be sure to include your policy number and the date you would like the cancellation to take effect.

Alternatives to cancelling your home insurance policy

Most people think that the only way to save money on their home insurance is to cancel their policy. However, there are a few other options that you can explore if you are looking to reduce your premium. One option is to speak with your insurance agent and ask for discounts. Many insurers offer certain discounts for things like installing security systems or taking a homebuyer education course.

You can also get insurance quotes from multiple companies and compare them side-by-side. This will allow you to see which company is offering the best rate for the coverage you need. Finally, be sure to review your policy every year and make any necessary changes. By taking these steps, you can save money on your home insurance without cancelling your policy altogether.

Should you cancel your home insurance policy or not?

If you’re considering cancelling your homeowner’s insurance policy, be sure to weigh all the risks first. In most cases, it’s better to keep your policy active rather than cancel it. And, if you decide that termination is the best alternative for you, be sure to contact your insurance broker first to discover all of your alternatives.

At InsureBC. we can help you find a policy that meets your needs and budget. Don’t risk going without coverage – contact us today! Or simply visit our online platform to get an online home insurance quote.

InsureBC’s licensed experts can help you from start to finish so you can feel confident and comfortable with your homeowners insurance decisions.