Do insurance companies drop/cancel your policy if youhave a lawsuit(premise liability) or demand letter and you havent report it to them? What are some reasons of why a insurance will drop you? Im talking about Home Insurance.
2007-07-19 05:57:05 · 4 answers · asked by Anonymous in Business & Finance ➔ Insurance
It depends on what state you are in. Some states won't allow a homeowners policy to be cancelled for claims, some will. ALL states will allow you to be cancelled, if you have a hazardous condition, and won't fix it.
Examples of hazardous conditions would be, owning a dog that's bitten someone, owning a trampoline, having an unfenced pool, having junk laying around your yard, not replacing your roof when it gets too old, not removing dangerous trees, not putting a railing on your porch, etc.
Some states will allow cancellation if you file more than one claim in three years. You'll have to discuss it with your agent.
2007-07-19 07:58:42 · answer #1 · answered by Anonymous 7 · 1⤊ 0⤋
If it's a quality company, then no, they won't necessarily drop you (though your premiums could increase in the future). However, you are ethically bound, if insured, to make them aware of any correspondence you receive that could hold liability for them (unless you plan to pay it off yourself without involving the insurance company, but beware of doing such things for even with a signed release, there can be instances of continued liability and then the company might not defend you).
Check this website for some basic info on Premises Liability.
http://www.expertlaw.com/library/premises_liability/premises_liability.html
BTW, it is always good practice to check on the insurance company's ratings from A.M. Best and/or Standard and Poor's. Not all companies are alike especially when it comes to reputation, claims paying, etc. Good Luck.
2007-07-19 06:08:11 · answer #2 · answered by 3jK 2 · 1⤊ 0⤋
They will drop you for excessive claims. "Excessive" varies from company to company; most will just raise your rates until you get the hint and take your business elsewhere.
They can drop you if you lied to get the coverage, such as telling them there is no wood-burning stove when there is, or telling them there is an alarm system when there isn't.
They can also keep your coverage in force, but not pay the claim. Your policy requires you to cooperate with them in defending you. If you don't report the claim in a timely manner, that makes it hard for them to get information needed in court, so they can say, "You didn't report it to us, so pay it yourself." (This last bit actually happened to someone I know.) Another one I know of (car insurance, but the same idea.) the guy told the insurance company his car was kept in a garage, so he could get a discount. It was vandalized parked on the street. They paid the $900, then canceled him. After being canceled by a major carrier for cause, he had to get his insurance from a high-risk carrier for three years. It wasn't cheap.
Bottom line: being less than honest with your insurance company can be very expensive.
2007-07-19 06:13:41 · answer #3 · answered by Ted 7 · 1⤊ 0⤋
The best source to research WHY your company can choose to non-renew you (besides non-payment): Your Policy! The policy will outline ALL reasons you can be dropped:
Typical reasons:
Underwriting violations
misrepresentation
claims history
insurer leaving market
Having a pending lawsuit would not be a reason unless it's pending due to misrepresentation or underwriting violations.
2007-07-19 06:30:18 · answer #4 · answered by Anonymous · 1⤊ 0⤋