If you don’t pay your home insurance premium by the due date, you may still have time to keep the policy in force. Most policies come with a grace period, giving you a little extra time – usually 30 days – to bring the policy premium current.
If paying the premium before the end of the grace period is going to be a problem, contact your agent right away. Missing the deadline for even a single home insurance payment can lead to serious consequences.
Your Home Insurance Policy Could Be Cancelled
If you don’t make a payment within the grace period, your insurance carrier has the right to cancel your policy. If your coverage lapses, you won’t have any protection for your home and possessions – and you’ll have to shoulder the costs if the worst occurs.
Your Home Could Be at Risk of Foreclosure
If your coverage is cancelled, your mortgage lender may purchase a new policy for you (typically at a significantly higher price than your original policy) and tack the payments onto your monthly mortgage bill. Worse, your lender could decide to foreclose on the property. Yes, you may lose your home if you don’t pay your insurance premiums.
Your Credit Score Could Take a Dive
If you have outstanding homeowners insurance premiums, your carrier could send the debt to collections. This will have a negative impact on your credit rating – you can expect your score to go down. If that happens, you’ll have a harder time getting approved for any type of credit in the future.
You Could Have Trouble Finding New Home Insurance
If you let your homeowners insurance lapse, many carriers will be reluctant to take you on. You’ll be in a high-risk category, so getting approved for a policy will take some effort. Plus, when you do find a carrier willing to provide coverage, you can count on higher rates and, possibly, less favorable terms.
Are Your Home Insurance Premiums Too High?
If you’re having trouble making your payments, an independent insurance agent may be able to find a policy with a lower premium rate. But, it’s best to shop around while you’re still current on your homeowners insurance – that way, it will be much easier to switch to another carrier to get cheaper coverage.
What if that ship has sailed? An independent agent can still help you find the coverage you need at the lowest possible price, but you may have fewer options with a lapse in your homeowners insurance.
For expert advice and assistance securing a favorable home insurance policy, call on the independent agents at Four Seasons Insurance.
Our highly experienced team can compare policies from dozens of carriers to find the best deal. You’ll be in good hands with the Four Seasons Insurance team – contact us to explore your coverage options, and you’ll walk away with the home insurance you need, at a price you can afford.
FAQs
If you stop paying for coverage or let the policy expire, the mortgage lender is allowed to buy insurance and charge you for it. This is called force-placed insurance or lender-placed insurance. A force-placed insurance policy usually protects only the lender, not you.
What happens if I never pay my insurance? ›
Here are some things to keep in mind if you miss a payment: Your coverage will lapse if you don't pay within the grace period, which is usually no more than 30 days past your due date. If you fail to secure coverage, your lender may purchase a policy on your behalf and add the cost to your mortgage debt.
What happens if you don't pay term insurance premiums? ›
Under a term insurance policy the policyholder is not under any obligation to pay the premium, unlike a credit card repayment or a bank loan. If you do not pay a term insurance premium, there will be no legal action taken against you. However, the policy that you took will simply get lapsed.
Does not paying home insurance affect credit? ›
A late homeowners insurance payment generally won't impact your credit score. If you're late paying your premium, your coverage could lapse, leaving you without protection. Your mortgage lender might also force you to buy more expensive insurance if your initial homeowners policy lapses.
Can you lose your mortgage without homeowners insurance? ›
If you're paying a monthly mortgage, you probably have no choice but to pay for homeowners insurance. If your mortgage lender requires it and discovers your home isn't insured, it could initiate foreclosure, resulting in the loss of your home.
Can I cancel homeowners insurance and get a refund? ›
What is a homeowners insurance refund check? You may receive a refund check from your prior homeowners insurance company if you cancel your policy before it expires, reimbursing you for the coverage you already paid for. You may also receive a refund in the event your lender makes a payment to your old insurer.
Can unpaid insurance premiums go to collections? ›
§ 408.110 Collection of unpaid premiums. (a) Basis and scope—(1) Basis. Under the Federal Claims Collection Act of 1966 (31 U.S.C. 3711), CMS is required to collect any debts due it but is authorized to suspend or terminate collection action on debts of less than $20,000 when certain conditions are met.
What if I did not pay my insurance? ›
If you fail to pay your premiums within the grace period, you will lose your insurance coverage. But there is hope: your policy can be revived. Most insurance providers allow reinstatement within two years of the lapse.
Do insurance companies try not to pay? ›
Denying Claims
In an attempt to increase their bottom lines, insurers can refuse to recognize claims. They seek to reward the employees that successfully deny their insured's claims and even go as far as terminating employment for the employees that fail to do so.
What if I am unable to pay insurance premiums? ›
This means that you can stop paying the premium and collect the available cash savings. You will no longer be covered by life insurance, but you will at least save some of the proceeds of the policy. You may, however, have to pay taxes on some of the cash value if the sum exceeds what you have paid in premiums.
If you don't pay all owed premiums, you may lose your coverage dating back to the first month you missed the premium payment. You may also have to wait to get health coverage. The 3-month premium payment grace period starts the first month you didn't pay, even if you make payments for the following months.
What is the effect of non-payment of premiums? ›
If the premium due is still not paid the insurer may reduce the insurance amount to the value of the redemption payment, provided that the instalments have been paid for at least two years. Failing this, the insurer may terminate the contract.
What happens if you stop paying home insurance? ›
Your Home Insurance Policy Could Be Cancelled
If you don't make a payment within the grace period, your insurance carrier has the right to cancel your policy. If your coverage lapses, you won't have any protection for your home and possessions – and you'll have to shoulder the costs if the worst occurs.
What happens if you let your homeowners insurance lapse? ›
When your policy lapses, you'll have to pay for any losses out of pocket. Not all homeowners insurance providers allow for late payments. Having a policy lapse on your record could lead to higher rates or denial of coverage going forward.
What is the grace period on homeowners insurance? ›
Depending on the insurance provider, policyholders may have a payment grace period where their payment is past due, but the policy has not been canceled yet. This time frame is typically between 1–30 days depending on the state regulations and individual insurer.
What happens to my mortgage if I can't get homeowners insurance? ›
If you fail to purchase coverage or let it lapse, your company may send your mortgage into default. Alternatively, the lender could choose to buy a policy on your behalf. This is called force-placed insurance, and it is generally more expensive and provides less coverage than a policy you would purchase on your own.
Is it bad to not have home insurance? ›
If there is a natural disaster or other unexpected event that damages your home, it will be expensive to repair or rebuild. Without insurance coverage, you may simply not be able to cover these costs, so you could lose your home and all the money you had tied up in it.
When should you cancel homeowners insurance? ›
You should wait until the closing has officially finalized before canceling your homeowners insurance policy. Explore Progressive's editorial standards for Answers articles to find out why you can trust the insurance information you find here.
