Insurer-Cancelled Renters Insurance
You may have heard horror stories about people who have made a claim on their renters insurance and received a notice of cancellation as a result. Keep in mind that an insurance company is a business, and as such, operates in order to make a profit. A single, reasonable claim is unlikely to result in a cancellation. However, a number of higher claims might result in notification from the renters insurance providers that the policy is being cancelled, as the risk to the insurers is too high. Insurance providers may consider a policyholder who makes a series of smaller claims to be a bad risk, as well. They might conclude the policyholder is accident- prone, trying to defraud the company by making smaller claims that are less likely to be investigated, or simply undesirable.
A renters insurance policy can also be cancelled by the company if the terms of the contract are changed or violated. For example, if you did not own a dog when you purchased the policy and later began fostering homeless pit bulls, the insurance company will either exclude liability or damage caused by the animals or simply cancel the policy all together. Moving from the property will also result in a cancellation of the renters insurance policy, although this doesn't mean the company won't issue a policy for another rental.
Another reason for cancellation is failure to pay. If you normally pay for your renters insurance with a monthly check and a check bounces, a claim that follows will likely be turned down. While most companies will continue to insure you if you make good on the check and there are no claims, few will allow you to cover the check and pay a claim that has occurred in the meantime.
In the event your policy is cancelled, the company must notify you in writing. They are not, however, required to obtain your signature, notify you by phone, or fulfill any other extraordinary requirements.
Renters Insurance Directory