How to Get Homeowners Insurance After a Lapse in Coverage

Depending on the type of lapse you’ve incurred, you also only have two options for coverage. Let’s take a look at each.

If you let your home insurance lapse, whether accidentally or purposefully, you may not be completely out of luck. The best course of action is to pay your premium as quickly as possible, and luckily, many insurers offer a homeowners insurance grace period for policyholders to make past-due payments. 

Data collected by S&P Global shows that the average home insurance premium rose about 11% in 2023, not to mention the cost of just about everything else. So, if your insurance policy lapsed because you needed time to adjust your budget to account for your higher premiums, you may still be able to maintain the same coverage amounts with your insurer by paying your past-due premium within your insurer’s grace period.

However, at any point during a policy lapse, effective immediately on the first day of your grace period, you’re considered uninsured. This means if a covered peril damages your home or possessions during that time, your insurer will likely deny your claim because, technically, you didn’t have coverage. 

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 crucial to note, too, that your current insurer may not accept a past-due payment and may drop your policy if you fail to pay your premium on time. 

It’s a general rule of thumb in insurance that the company you bound your lapsed policy with probably won’t insure your next policy because they deem you too risky.

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 may 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 premium late, but during the grace period, you may avoid having a lapse of coverage on your account. Having a lapse of coverage on your insurance history can make it harder for you to find insurance in the future, as potential insurers see those who let their policies lapse as a risk that may not be worth taking.

While missing payment is one of the main reasons for a lapse in home insurance, it may not be the only one. If you’re stunned by a lapse in coverage, swearing to yourself that you remembered to pay your bill on time, it’s possible your policy lapsed for another reason.

Let’s take a look at some key issues homeowners may face that could result in a lapse in home insurance and, eventually, policy non-renewal or cancellation. 

When insurance companies perform home inspections, they look for a risk on your property that could lead to a potential claim. They may see that your roof needs to be replaced, your electrical system poses fire hazards, or your outdated HVAC system needs some updates. If you don’t follow their instructions within their proposed timeline, you may face a policy cancellation, causing a lapse in coverage.

Whether you’ve filed several claims, paid too many bills late, or your city has become increasingly prone to natural disasters, your insurance company may consider you too risky to continue insuring. Your insurer may cancel your policy due to this risk, and if you don’t seek coverage elsewhere, you may face a lapse in coverage, making you an even higher risk to future insurers.

If you didn’t tell the truth, the whole truth, and nothing but the truth to your insurer when you bound your policy, they may cancel your policy. If your insurer discovers an omission or a blatant lie that changes your status as a homeowner, they may drop your policy, leaving you with a lapse in coverage.

Insurers need to know exactly how risky you are as a policyholder, so lying or omitting the truth about your risk, like how many people live in your home, if you own a restricted dog breed, or if you have an attractive nuisance on your property like a swimming pool or a trampoline could lead your insurer to drop your policy.

A common reason for a lapse in coverage is a missed payment. Some insurers offer a homeowners insurance grace period for policyholders to pay what they owe without losing coverage, but those who fail to pay will have a lapse in their coverage and eventually a canceled policy. 

Unfortunately, sometimes insurers leave states or declare insolvency (can’t pay their debts), leaving policyholders with new insurers or requiring them to find a new policy before theirs lapses.

For example, data from the National Oceanic and Atmosphere Association (NOAA) shows 11 severe storms in Florida between 2019 and 2023 caused billions of dollars in damage each. So, it makes sense that there’s currently a trend of insurers leaving the state or becoming insolvent because of the influx in claims in the wake of these natural disasters. 

While insurers will contact policyholders or mortgage lenders about their plans to leave the state or drop policies, this sometimes leaves policyholders or their mortgage lenders the task of seeking a new insurer. So, if you miss the notice that your insurer is leaving your state, you may risk a lapse in homeowners insurance.

If your policy lapses or is canceled, you will likely receive a lapsed policy letter from an agent notifying you of the timeline you have to rectify your issue or seek coverage elsewhere. Remember, letting your policy lapse is never a good idea, as having a lapse in coverage makes it harder for you to find coverage in the future.

If you’re still within your current insurer’s grace period, which is typically 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 forced to get a policy from another insurer.

If you still owe money on your house, your 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 a lapse in coverage. However, 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 you to maintain 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.

Similar to force-placed insurance, 33 states may offer high-risk homeowners policies in the form of Fair Access to Insurance Requirements (FAIR) Plans.

FAIR Plans are a last-ditch effort for homeowners who can’t find a policy through a standard insurer because they’re too risky to insure, whether that’s because they live in an area prone to severe weather or because they’ve had a lapse in coverage. Like force-placed insurance, FAIR Plans are expensive and generally provide less coverage than policies you can find on the voluntary market, but some coverage is always better than none.

Homeowners in 33 states have the option to bind a FAIR policy through their state’s insurance department. You can check this directory hosted by the National Association of Insurance Commissioners (NAIC) to find the contact information for your state’s insurance department to see if your state offers FAIR Plans.

While some states offer FAIR Plans specifically for those considered high-risk due to the likelihood of their homes suffering damage from severe weather, these states offer policies for homeowners who can’t find insurance with a private insurer or agency for several reasons.

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 and have a lapse in coverage, your options may be limited when you seek a new policy.

The insurer you had a lapse in coverage with will most likely not take you back until you’ve proved you can make payments. Since that lapse in coverage will affect your insurance score, it will likely raise your premiums, too. So you’ll likely have to choose another carrier that operates in your state and offers affordable policies for high-risk policyholders. You’ll need to contact your agent or use Clovered’s website with a few pieces of information about your living situation.

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 pay 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.