“How do I get a new homeowner's policy when I have an open claim that is still in dispute?”

Many clients have been asking us this question recently.  Most of them have a Hurricane Michael or Sally claim that is still in dispute (meaning, the insurer has not yet paid the claim in full) and their current insurance company has decided not to renew their policy or they have decided to switch to a different insurance company.  If you or a family member are trying to obtain new insurance while you have an open claim in dispute, here are a few things to know:

1.  You Have the Right to Switch Insurance Companies at Any Time

Never forget: who you select to insure your home is your absolute right.  You can switch insurance companies any time you want, even if you have an open claim in dispute.  In fact, if you are not happy with the way your current insurance company has treated you during its investigation and handling of your claim, this may be a reason to consider switching.  Know that your current claim will not be transferred over to your new insurance company.  You will still have to deal with your old insurance company on the open claim until it is resolved. 

Although you may find that other insurance companies are willing to offer you the same or better coverage at a better rate, they will search your claim history and be aware of your open claim which may impact the premium they offer.  But, there are no added fees, penalties, or other repercussions simply for changing companies.  This is a common occurrence for insurance companies.  At the very least, if you think you want to switch insurance companies, it is worth shopping around for insurance quotes.  You are well within your rights to obtain quotes and switch insurers at any time.

2.  If Your Insurance Company Issued a Non-Renewal

Sometimes the decision to switch companies is not your own.  Your insurance company may decide not to renew your policy for a variety of reasons, i.e., increased market exposure, the company's decision to no longer issue policies in a certain high-risk area, etc.  Unfortunately, when an insurance carrier gets over-extended in certain areas of the state, they may need to lower their policy count to avoid putting their reserves at too much risk, so this is an authorized and legitimate reason for a carrier to non-renew your policy. 

However, Florida has consumer protection laws in place to prevent non-renewals in areas where the Governor's office issued a State of Emergency.  First, an insurance company generally must give you at least 120 days written notice of their intent to non-renew.  Also, under Florida law, if your home was damaged by a hurricane (which resulted in issuance of an emergency declaration) your insurance company may not non-renew until 90 days after your home has been repaired.  If you received a notice of non-renewal from your insurance company and have questions about why your insurance company decided not to renew or what actions you should take in response, you should contact your insurance agent immediately or seek help and answers through the Florida's Office of Insurance Regulation website.

 3. Many Homeowners with Damaged Property are Switching to Builder's Risk Policies

Builder's risk policies are designed to provide coverage for buildings and structures during the course of construction or renovation because the structure is more vulnerable to weather-related events, vandalism, accidents, and other risks.  Some of our clients, whose homes were damaged by a hurricane and remain under construction, have found this is the best alternative.  Builders risk insurance is designed to be flexible so it accommodates your unique construction risks and will provide different definitions for property covered and not covered, as well as perils covered and not covered.  If your property is under construction and you are struggling to find new insurance, discuss the option of a builder's risk policy with your insurance agent. 

4.  The Importance of Having a Good Insurance Agent

Insurance is complicated.  Finding a new insurance company and new coverage can be confusing and inconvenient.  That is why it is best to reach out to your insurance agent if you are considering switching companies or you received a notice of non-renewal.  An experienced agent can help you begin looking for new coverage, determine how much and what type of coverage you need, help you choose a deductible you are comfortable with, and obtain multiple quotes that you can compare and discuss.  Committing to an insurance company is a big deal and a big decision.  As many of our clients have learned, it can lead to a long and involved relationship if you do have to file a claim.  Take the time to do some online research and read customer reviews before making your decision and be sure to discuss your options at length with your insurance agent. 

If you have any questions about your coverage, renewing your insurance, or an open insurance claim, never hesitate to contact our experienced insurance attorneys for a free, no-cost, no-obligation consultation.