How to Get Homeowners Insurance After a Lapse in Coverage

While your homeowners insurance policy can lapse for a number of reasons, there are essentially two different kinds of lapses at the core of each policy. The first is when a lapse occurs, and you catch it quickly; the second is when you let your coverage lapse and fail to catch it quickly enough.

So, if you’re wondering what happens if my homeowners insurance lapses, depending on which type of lapse you’ve incurred, you may only have a few options for coverage. Let’s take a look at your options.

Many insurers typically have a grace period, usually up to 30 days, from the date of the home insurance lapse due to a missed payment. If you pay during the grace period, you’ll be able to keep the same coverage amounts. However, failing to make a payment within the grace period will result in your insurer dropping your policy and you losing coverage.

If your homeowners insurance policy lapses and you pay your past-due premium during the grace period, you may avoid having a lapse of coverage on your account.

However, if your home or possessions are damaged by a covered peril during that grace period, your insurer will likely deny your claim because you, technically, didn’t have coverage during that time frame. This means you typically have no coverage on your home effective immediately on the day of the lapse.

Covered perils are things like hurricane damage, water damage or roof damage. Any of those instances, or more, that damage or destroy your home will leave you footing the bill for the repairs since you were delinquent on your homeowners insurance premium.

If you let your policy lapse and fail to make the missed payment during the grace period, you will no longer be insured by your current company. Instead, you’ll be forced to shop around for home insurance and may have to purchase coverage from another carrier.

It’s a general rule of thumb in insurance that the company you let your lapsed policy with will probably not insure your very next policy because they deem you to be too risky.

The insurer you had a lapse in homeowners insurance with will most likely not take you back until you’ve proved you can make payments. So you’ll likely have to choose another carrier that operates in your state. You’ll need to contact your agent or use Clovered’s quoting tool with a few pieces of information about your living situation.

Since that lapse in coverage will go on your insurance score, it’ll likely raise your premiums. This is because insurers may find you to be riskier and believe you’ll fail to make future payments on time, too.

The way you pay for your home will determine how you can get coverage after a homeowners insurance lapse in coverage. Let’s break down the most likely scenarios.

To get homeowners insurance after a lapse in coverage on a home you own, the first thing you’ll want to do is gather quotes from other insurers on the standard market. While your previous insurer may not be eager to have you as a policyholder, you may have better luck taking your business elsewhere.

If you own your house outright, nobody is forcing you to have homeowners insurance because it isn’t required by law. Although we always recommend keeping a policy on your home at all times. If you own your home outright, have a lapse in coverage, but still desire coverage, your options may be limited. 

If you’re unable to find coverage on the standard market after your homeowners insurance lapse, your only other option will be a last resort option known as the Fair Access to Insurance Requirements (FAIR) plan. FAIR plans are available in many states to assist high-risk homeowners in getting the coverage they need. These plans are often a last resort option because they’re expensive and don’t offer great coverage. 

If you still owe money on your house, your mortgage lender will require you to have homeowners insurance at all times. That means that even though your insurer may have a 30-day grace period, your lender likely doesn’t.

If you pay your homeowners premium through your escrow account, that account should automatically pay your premiums every month. The only way to miss a payment via escrow is if you haven’t paid your mortgage or your lender used escrow to cover other expenses that haven’t been paid.

If you stay up to date on your mortgage and escrow payments, you shouldn’t have to worry about having a lapse in coverage. If you pay your premiums yourself, instead of through an escrow account, and are facing a lapse in coverage, your lender may take action.

Since lenders require homeowners insurance at all times to protect their investment, any lapse in coverage is dangerous for them. If your coverage lapses, they can legally purchase a homeowners policy to protect the home and force you to pay the premiums. This is called force-placed insurance.

The issue with force-placed insurance is that your lender likely won’t shop around to find the best deals. And they’ll want to ensure the house is covered to the amounts they want. So you’ll likely have even higher premiums with forced-placed insurance than if you shopped around on a website like Clovered and purchased a policy on your own.

After a lapse in home insurance coverage, your insurer’s grace period will likely be, at most, about 30 days. In these 30 days, you can simply pay any unsettled debts to them and your policy will usually continue the date of the payment without a lapse going on your record. 

However, if your coverage lapses and you miss the grace period, you’ll be uninsured until you get a policy from another insurer.

If you don’t have homeowners insurance, you’re playing a game of risk with your most valuable investment and possessions. If something like a windstorm were to roll through, damaging your roof, siding and some of your personal property, you’d be responsible for covering the cost of repairing or rebuilding your home.

And nobody has a few hundred thousand dollars sitting around that they’re just waiting and wishing to use for damages. If you have a homeowners insurance policy, you’ll be covered for many of the most commonly filed claims — and more.

Finding a home insurance company that accepts lapses in coverage — and is affordable — is going to be tricky. The penalty for not having home insurance is all on you. You’ll probably pay more for a policy. But our friendly agents at Clovered can help you find coverage that fits your needs and your budget.