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Can my insurance company drop my coverage?

Home and auto insurance can give you peace of mind knowing you are entitled to compensation for a valid claim. However, you and other Washington residents should understand that insurance companies can drop you for any reason without warning.

As Realtor.com explains, insurance companies are in the business to make money. Paying out on claims, especially those amounting in the thousands or higher, hits them in the pocketbook. Therefore, they may drop customers who, in their estimation, are a risk. You stand a good chance of having your coverage dropped if you fail to pay your premiums, commit insurance fraud or violate the terms of your policy, but the following common reasons to lose your coverage may surprise you:

  • You live in a high-risk area, such as a region that is prone to hurricanes, floods or wildfires.
  • Your roof is old or needs repairs and you do not replace the roof upon request.
  • You filed too many claims – usually more than one claim every 10 years.

The last point can be especially problematic if you bundle your homeowners’ insurance with your auto coverage. For example, you could be dropped if you had a recent claim to repair your roof from storm damage, and you filed another claim after a car accident. You may avoid having your coverage dropped by choosing to make some repairs out of your own pocket.

Insurance law is complex and sometimes necessitates legal counsel if you believe your insurance company is acting in bad faith. Therefore, this information is not meant to be taken as legal advice.

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