Erec 2006 Blog

Homeowner Insurance Cancellation

January 9th, 2008

 Like most of the other insurance policies in the market a homeowner’s insurance also gives you and option to drop it as per choice. However cancellation of the policy brings in two important questions to your head. Firstly, would you be able to cancel the policy at any time and if there is a penalty to do that? Answer is simple. As a thumb rule, if u r canceling a policy before its contract expiry date, then early termination charges would apply. In such scenario insurance provider retains a certain amount of premium with them. This is also termed as “short rate” penalty. The other way here could be the company may decide to impose “surrender charges” for the policy for the remaining months in contract. Second question you may fear of is whether the insurance provider has the authority to cancel the policy or not. Yes they may do so, but only under two given conditions: if they sense that the insured is fraudulent or if the premiums are not paid in time. apart from these two conditions the company has no right to cancel the policy of the insured. and such a clause should be clearly mentioned in the agreement.

the point here is why would a need arise to cancel the policy, if you have carefully chosen the right policy around? To avail the best of any insurance you would have to abide the rules and regulations as per the contract. And when it comes to the existence of your dream house, you would not want to take short cuts!   And another thing: Always compare homeowners insurance rates carefully.    

Entry Filed under: Business