What to Expect and How to Negotiate With the Insurance Company.
Owning a home and keeping up with repairs isn’t always easy. In a 2020 study, more than half of homeowners reported having to do an emergency home project each year.
But what if your insurance company tells you it is going to cancel coverage because you didn’t comply with a recommendation or do repairs? Here’s what you need to know to help protect your coverage.
What Makes an Insurance Company Require Repairs on a Home?
Requests by your insurer for you to do a repair will usually come following one of three things:
- Home inspection: The company may have made recommendations after a home inspection. These can relate to liability issues, general maintenance, prevention, or safety.
- Follow up on application: It could be due to questions you answered or comments you made during your application. Is your roof old? Is your plumbing, electrical box, or water tank up to date? Some companies may have requirements that you have to fulfill before they will insure you.
- Risk after a claim: Sometimes, as a result of a claim, the insurer becomes aware of a risk in your home. They have already paid out on a loss; it is normal for them to make suggestions to prevent further losses or claims.
Do You Have to Do What Your Insurer Asks?
If the insurance company has made a recommendation, ask them if it is mandatory or a suggestion. If it’s just suggested, you may not have to do it. They are tips for your safety. These suggestive recommendations should not put your policy at risk. If you are not sure whether what the insurer has asked you to do is mandatory, call and get clarification.
Tip: Don’t put it off until the last minute. You need the time to find out what is required of you; you deserve to know as soon as possible.
If the insurer asks you to do a repair that is mandatory, it is a requirement of your insurance contract.
Tips to Help You With Insurance Company Demands
Failure to comply within the timeline your insurer has provided may put you in a position where:
- You may not be renewed. This means you are canceled on the renewal or expiration date of the policy. This is also called nonrenewal.
- The insurer may cancel your policy mid-term. This means the company cancels it before it expires if the situation is critical enough. Mid-term cancellations are serious. Before you get canceled, you will receive a clear notification. Do not put off responding to these types of notifications.
Problems With Having Your Insurance Cancelled
Insurance is often a condition of having a mortgage. It depends on the type of mortgage you have and the size of your down payment.
Many people find themselves in very difficult situations when an insurance company cancels them. For instance, let’s say your insurance is canceled due to non-payment. This can impact your future insurability. It affects your insurance score, which is partly based on payment history. This can cost you and make you pay higher rates of insurance.
Think about the reason why you haven’t done the repairs to your home. You may have a few options about how you can fight with your insurance company. The goal is to prevent them from canceling you due to incomplete repairs.
Tips for Negotiating With Your Insurer When You Disagree
If you don’t agree with the repairs your insurer is asking you to do, it may not be easy to convince them they are wrong. One way to present a strong argument is to get a second opinion from a licensed professional.
If your insurance company asks you to replace your roof because it is too old, for instance, get a professional roofer to do a roof inspection. Is the insurer asking you to install a handrail where you don’t think it is needed? Call your local city inspector; then, ask them about handrail requirements. If you meet the safety standards, ask for a report.
Insurance companies often question the safety of the electrical wiring in homes. Certain types of wiring found in old houses, such as knob and tube wiring, can be dangerous.
Your insurance company may think your electrical box needs to be replaced. There have been many cases of fires starting due to overloaded electrical boxes. This is especially true these days; you likely have many appliances turned on at once. The power supply needed in the 1950s or even the 1980s was quite low, compared to what is needed now.
The average person can’t argue with these things, but you could hire a professional electrician to check your wiring or electrical box. If the expert is willing to confirm that it will be fine for another few years, you can share this with your insurance company. Then, ask them to reassess.
Insurance companies know that professionals will not risk their license to give false assessments. This is why a second opinion may help you change your insurer’s mind.
Why Do You Need to Justify Everything?
It can be frustrating to deal with the insurance company, but we do not always have the expertise needed to judge the risks for ourselves. It is hard to take an insurance company telling you what to do.
Tip: If your arguments are valid, hire a professional that will support your opinion.
When you negotiate insurance, you’re negotiating a contract agreement. It needs to remain professional. It isn’t personal, even if it might feel that way.
Keep this in mind: You expect the insurance company to pay you hundreds of thousands of dollars if you have a major claim. This is why it has a right to protect its investment by asking for critical repairs to be completed as a condition of your insurance agreement.
Think about how much money you expect an insurance company to give you if something goes wrong. This should make it easier to understand why it has these demands. Keeping open communication with your insurance company will make things easier. It can also help you stay insured at the lowest prices possible.
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