How to get coverage after a non-renewal

A non-renewal is a carrier's decision not to offer another policy term when the current one expires. It is not a cancellation: the policy stays in force until the expiration date, claims during that time are covered as usual, and the carrier must give written notice in advance. Carriers non-renew for reasons tied to the policyholder, such as claims or an ageing roof, and for reasons that have nothing to do with the policyholder, such as a decision to write fewer homes in a wildfire zone or to leave a state. In recent years the second kind has become common in parts of the West.

The notice is unwelcome, but it comes with time, and the order in which that time is used decides whether the replacement policy is comparable or worse. This guide covers the steps for a homeowners or auto non-renewal in Arizona, Nevada, Utah and Idaho.

What to gather

Pull these together the week the notice arrives.

• The non-renewal notice itself, with the expiration date and the reason stated.
• The current declarations page, so a new carrier can quote the same limits, deductibles and endorsements.
• Your claims history for the past several years, and a copy of your CLUE report, which lists property and auto claims reported by carriers and can be requested free once a year.
• For a home: roof age and material, the year of the last electrical, plumbing and water heater updates, photographs of the exterior, and any wildfire mitigation work done.
• For auto: every driver's licence number and their tickets and accidents in the look-back period.
• Your mortgage lender's contact details and insurance requirements.

Step one: read the notice and find out the real reason

Each state regulates how far in advance a carrier must send notice and what the notice must contain, and the insurance regulator in each of Arizona, Nevada, Utah and Idaho can confirm the rule for your policy type. Check the date the notice was mailed and the date the policy ends; that window is your working time. If the notice gives a vague reason, ask the carrier or agent for the specific underwriting reason in writing. Most states give the policyholder the right to request it.

The reason sorts the problem into one of three kinds. A property condition, such as a roof past the carrier's age guideline, overgrown vegetation, or a hazard found on inspection, may be curable. A loss history or driving record is not curable, but it is disclosable and will shape where the next policy comes from. A carrier-wide decision, such as reducing exposure in an area, says nothing about the policyholder, and other carriers may view the same property quite differently.

Step two: fix what can be fixed, and document it

If the reason is curable, ask the carrier whether correcting it will reverse the non-renewal. Some carriers will rescind a notice if the roof is replaced, a tree limb over the house is removed, or defensible space is created before the expiration date, and some will not. Even if the current carrier will not reconsider, the work and the photographs of it make the home more insurable elsewhere. Wildfire mitigation is especially relevant in the Prescott and Flagstaff areas, the foothills around Boise, Reno's wildland edge and the canyons of northern Utah, where carriers score properties on vegetation, roofing and access.

If the reason is a claims history, review it for errors. A CLUE report sometimes lists an inquiry that did not become a claim, or a claim paid at nothing, and a documented correction can matter to the next underwriter.

Step three: shop early and in the right market

Start shopping as soon as the notice arrives, not in the last week. Standard carriers each apply their own underwriting guidelines, so a home or driver declined by one may be accepted by another at a similar price. An independent agent can submit the same risk to several carriers at once and tell you quickly which markets are open to it.

If the standard market will not write the risk, the next options are the surplus lines market for property, where carriers are not admitted in the state but are permitted to write risks the admitted market will not, and the non-standard market or the state's assigned risk plan for auto. Surplus lines policies can be broader or narrower than a standard form, are not backed by the state guaranty fund, and are subject to a surplus lines tax, so compare the forms carefully rather than the premium alone. Treat any surplus lines or non-standard placement as temporary and ask what would let the property or driver return to the standard market.

Step four: bind before the old policy ends

Choose the replacement, pay the first premium and receive the binder before the expiration date, and set the new policy to start on the same day the old one ends. A gap of even a day can breach a mortgage requirement, leave a period uninsured, and count as a lapse that raises future premiums, particularly for auto. Send the new declarations page to the mortgage lender so it does not buy force-placed insurance, which is expensive and protects the lender rather than you.

Then compare the new policy line by line with the old one. Replacement cost on the dwelling and contents, water backup, ordinance or law, and the wind and hail deductible are the details most likely to have changed in a placement after a non-renewal.

Common mistakes

Each of these makes the next policy worse or harder to get.

• Ignoring the notice until the week the policy ends.
• Assuming a non-renewal must be the policyholder's fault and not asking why.
• Leaving a claim or a ticket off the new application to improve the quote.
• Buying the first surplus lines quote without reading the policy form.
• Letting a single day pass between the old and new policy.
• Forgetting to notify the mortgage lender of the new carrier.

A worked example

Suppose a homeowner outside Prescott receives a notice in March that her homeowners policy will not renew in May because of wildfire exposure and a roof over twenty years old. She asks for the reason in writing, which confirms both. Her roofer quotes $18,000 for a Class A fire-rated roof, and she spends $1,500 clearing brush within the zone her fire district recommends. The original carrier still declines, but two standard carriers now quote her: one at $2,600 a year and one at $2,900 with extended replacement cost. The only other option before the work was a surplus lines policy at $4,800 with actual cash value on the roof. She binds the $2,900 policy to start on her old policy's expiration date and sends it to her lender. The figures are hypothetical; the roof and the mitigation opened the standard market, and binding before the expiration date avoided a lapse.

How to use this

If you have received a non-renewal notice, send it to us with your declarations page. We will read the reason, tell you whether it is curable, and submit the home or vehicles to the carriers we represent in Arizona, Nevada, Utah and Idaho, standard and surplus lines, with a line-by-line comparison against what you had. If the current carrier will reverse the notice after a repair, that may be the simplest answer, and we will say so.