What happens when your home contents insurance expires?


Homeowners insurance lapses can happen to even the best policyholders. An oversight on your insurance account or a failed automatic payment could cause your default coverage to lapse. It’s relatively easy to handle – pay your delinquent insurance bill and your coverage should be reinstated.

a person sitting at a table with a laptop computer: saving for the future is serious business

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Saving for the future is serious business

However, dropping your home insurance policy is risky and should be avoided. If your homeowners policy expires, if only for one or two days, damage that occurs during that time, such as a burglary, storm, or fire, can leave you without coverage to pay your losses. In addition, a lapse is noted on your home insurance file and this can lead to higher insurance premiums in the future.

What happens when my home contents insurance expires?

If you don’t pay your insurance bill after a certain amount of time, your home insurance will be terminated, causing the coverage to lapse. However, reasons other than non-payment can cause your home insurance to lapse, including:

  • You misrepresented yourself in your application: For example, if you’ve omitted that you own a pit bull or you don’t plan on living at home full-time, your insurance company may cancel you if they find out.
  • You are considered risky: Your carrier may decide that too many claims or late insurance payments puts you at too high a risk to insure. Or, if the area you live in has just had deadly wildfires or floods, the insurance company may reconsider insuring you.
  • A negative home report or overdue maintenance: If your roof needs to be replaced and you avoided it, or if the initial inspection of your home found that the electrical wiring is faulty or outdated but has not been replaced, an insurance company may decide to cancel your coverage.

Any of these scenarios can cause you to lose home insurance coverage. Finding an alternative quickly before your insurance expires and you run out of coverage is vital. The homeowners insurance grace period is usually 30 days if you forget to pay your premiums. If you receive a non-payment warning letter, you must act quickly to reinstate your policy and avoid the loss of coverage. Here’s what else could happen:


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Your mortgage lender will take out a home insurance policy

Part of the requirements that you agreed to in the big stack of closing documents you signed when you bought your home is to maintain ongoing home insurance coverage with the lender as named insured. When your policy expires, the insurance company will notify the lender, who can purchase a policy on your behalf to prevent you from leaving your home without coverage.

The problem is, the lender may not shop around to find the best home insurance deal for you. You may have to pay for new home insurance that is much more expensive than your expired one. It may also include home structure only insurance, leaving all of your personal belongings uninsured.

Your premiums may increase

Even if you reinstate your existing home policy, the carrier will likely note the expiration in your records. Expiration can lead to higher insurance premiums as your carrier may find you riskier to insure because you had no coverage for a period of time.

You will struggle to find cover with another carrier

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If you don’t make up for the lapse, other carriers may not insure you. One of the questions most insurance applications ask is whether you have had a coverage shortfall in the past. If you did, you could be rejected. And not being honest is even worse – if (and when) the carrier finds out, your policy will be canceled due to misrepresentation or fraud.

You should pay losses out of pocket

As mentioned, an expiry of your cover means that you were uninsured for a certain period. It could be days or weeks, but the risk is the same – if something happens during the expiration period, you won’t have financial protection from homeowners insurance and will have to pay the costs and losses out of pocket.

How Do I Get Homeowners Insurance Over Time?

If your home insurance policy has expired, finding coverage should be an immediate priority. Even if you plan to challenge the expiration date with the carrier, the process can be slow. Having coverage while you wait for a decision is necessary. To get started, select a few insurance companies and request quotes.

After you’ve gathered a few quotes, carefully compare rates, policy limits, and deductibles to narrow your list to two or three insurance companies. Do your carrier research by looking at customer reviews. After choosing a home insurance company, complete the application process as truthfully and thoroughly as possible. Be sure to set the effective date immediately and contact your mortgage lender with the details of your new policy before they take out home insurance on your behalf.

Ways to Save on Homeowners Insurance

If you’re struggling with the cost of your home insurance and having trouble making the monthly payments, finding ways to save on your home insurance can bring some relief to your budget. Consider the following ideas to lower your rates:

  • bundling: Buy your car and home insurance from the same carrier to get a discount on both.
  • Switch provider: Regularly compare the rates of home insurance from a handful of carriers. You may find it cheaper to switch companies to pay less for coverage.
  • Increase your deductible: If you don’t expect to file a homeowners claim, you can increase the deductible to a higher amount to lower your rates. The key is to raise it enough to save on your premiums while still being able to cash out the amount in the event of a claim.
  • Adjust your ownership limits: Take the time to add up the cost of your personal property, such as furniture, fixtures, electronics, and more. You may be paying more for personal property insurance than you own and may be able to reduce the amount.
  • Add a security system: Many of today’s home security systems are affordable and do-it-yourself. By adding cameras, door sensors, deadbolt locks, smoke detectors or a water leak detector, you can save on your home insurance.

Frequently Asked Questions

What happens if your home contents insurance is terminated?

Canceling your home insurance policy can be annoying. You will receive a letter explaining why your insurance has been terminated with an effective date. You will have to find a new home insurance policy to replace the canceled one. Don’t delay, or your coverage may expire, exposing you to risks such as fire or theft.

How much does home contents insurance cost?

The average annual cost of home insurance is $1,312 for a home with a $250,000 home coverage amount. Your rate may vary based on where you live, the value of your home, and your claim history.

Who has the best home insurance?

There are many good health insurers. Bankrate’s list of best home insurance companies includes USAA, MetLife, Allstate and Lemonade. To find the coverage for your needs and budget, shop around and get quotes from a few carriers before making a decision.

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