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Once an insured has finally got their home insurance in place, they realize how much peace of mind it is giving them. If it gets cancelled, this can raise both a lot of questions and concerns.

Can They Cancel My Homeowners Insurance?



Insurance Companies are businesses. Like any business, they are in it to make money. They have the right to determine who they want to sell their insurance products to. They also have the right to cancel the insurance they have sold if they choose to do so. At the same time, these companies don’t want to lose clients. Therefore, they are not going to cancel insurance for no reason. Homeowners insurance is an important insurance product. But, there are some reasons that the insurance company may cancel its coverage.

Homeowners Insurance Cancelled for Non Payment

One of the most common reasons homeowners insurance gets cancelled is because the insured failed to pay the premiums. Even if an insured is a long time client with an insurance company, they will not tolerate late or missed payments.

They do understand that on occasion there can be valid reasons why payment may be missed. Most insurance companies are forgiving once or twice. But, they will want a valid reason. Also, they will likely issue a warning that if it happens again, they will cancel the insurance coverage.

Some of the Reasons for Non Payment


There are different reasons why some people fail to pay their homeowners insurance.

  • They forget when the payment is due.
  • Some neglect to make sure there is enough money in their bank accounts.
  • Others just figure the insurance isn’t necessary.
  • Some decide to go with another insurance company.

At times individuals run into financial difficulties and cannot afford the premiums.

Each of these can lead to having the home insurance cancelled. But, some can lead to even greater repercussions. It can mean it will be far most costly and difficult to get another insurance company to offer homeowner’s insurance.

Home Not Fit To Be Covered

roof repair

Some insurance companies may offer to provide homeowners insurance, but only on some conditions. Quite often they will send an inspector out to check the home. The inspector may discover that there are some needed repairs to be done on the house. Ones that if left unattended would put the insurance company at risk. The Insurance company may state they will insure the property, but only on the condition that the repairs are completed. They will allow a certain amount of time for this. Then they will want proof that the repairs have been done. If they aren’t then there is a risk the insurance company will cancel the policy.

Common repairs the insurance company may ask to be repaired;

  • Roof repairs
  • Electrical problems
  • Plumbing problems

Anything that they may deem a high risk for them.

The insurance company has no jurisdiction to enforce the repairs on the home. But, they can cancel the insurance coverage if they determine not doing so is putting them at risk.

Too Many Claims

There are some individuals who have homeowner’s insurance and will try and put in as many claims as possible. They have read their policy well and know what their coverage is. For example, their insurance policy may cover a burn to their carpet or furniture. Or water damage from a plugged sink. It is fine when there is a valid claim. But, insurance companies don’t relish the thought of paying out multiple claims for just one client. What is going to end up happening is an increase in premiums. Or worse still the insurance will be cancelled. What is considered to be too many claims no matter how valid is going to depend on the insurance company

CBC released a news articles a few years back that dealt with this very topic. It covered a piece about a Dartmouth homeowner who had his homeowner’s insurance cancelled because he has issued two claims. The letter received notifying of the policy cancellation stated… “This policy falls under our property risk management guide, unacceptable conditions and underwriting referrals: the policy has had more than one claim in the past five years,” the letter read. Source:

Yet both claims were valid. One was for an overflowing sink. The other  was as a result of Hurricane Sandy damaging the roof of the home.

What Happens if They Cancel Your Insurance?

Once the homeowner’s insurance has been cancelled, it can create some challenges trying to find new insurance coverage.

In the case of the individual who had his insurance cancelled for too many claims, he ran into two major challenges.

  1. Was finding and a new insurance company
  2. The next task was finding affordable premiums. Which in this case the insured ended up having to pay triple what he was paying.

What You  Can You Do To Avoid Cancellation

To begin with, one should never take their homeowner’s insurance for granted. Every effort has to be made to avoid the possibility of cancellation. Here are some tips to help with this.

To Avoid Cancellation Due to Late or Non Payment

  1. Be aware of how much the premiums are and when they are due. Plan ahead for these payments.
  2. If an auto withdrawal has been set up make sure the bank account never drops below a specified amount.
  3. Mark the insurance payment dates on a calendar well ahead of time to allow for arrangements of the insurance.
  4. If you are changing insurance companies or need to cancel the insurance, do it properly. Don’t just stop payments.
  5. If you realize you have missed a payment contact the insurance company immediately. Explain the situation and get the payment made.

To Avoid Cancellation Because of Too Many Claims

  1. Don’t make small claims just because they are beyond your deductible.
  2. Keep up on all repairs around the home that could be a risk of damage because of acts of nature.
  3. Know how many claims your insurance company will allow and within what time frame.

Other steps to Avoid Cancellation

One final step that can be taken to help avoid cancellation is to shop for a reputable insurance company that has some leniency in the event of a late or lost payment. Do your research as to how they view a specific number of claims.