What is the difference between having my insurance policy “cancelled” versus “non-renewed” and, does either impact my future ability to get insured?

These are issues that all insureds in Florida should be paying close attention to so, I am dedicating the next two posts to this issue.

During the past 3 years, several large, multistate insurance companies have left Florida entirely, or have reduced their total number of insureds. In so doing, they have both cancelled and non-renewed hundreds of thousands of homes. A non-renewal is a decision by the insurance company to no longer insure your home, and occurs at the end of the insurance policy.

Most, if not all, homeowners’ policies in Florida are annual, so you would receive a notice months prior with a statement as to the reason why the policy will not be renewed. For most reasons, getting non-renewed is a part of insurance in Florida, and should have no direct impact on your ability to get new coverage. Although, the reason the insurance policy is not being renewed may be a reason why another similar carrier may not write you. But, the act of being non-renewed is not relevant.

When most people are non-renewed, they often accept whatever insurance company is offered as a substitute or will often jump to Citizens Property Insurance Corporation. While this may be one of the only options, you must remember that Citizens policies may be limited in the coverage they provide, such as future limits on sinkhole insurance coverage.

Additionally, because Citizens is owned by the State of Florida, you cannot sue for extra-contractual damages, otherwise known as “bad faith” insurance practices. Suffice to say, when you receive a notice of cancellation, you should consider it an invitation to examine your homeowners’ insurance and look at all options.

Read our tips on filing a sinkhole claim.

Have a burning question you’d like to ask about sinkholes? Let us know.

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