A homeowner’s policy is a necessary cost of owning a home. For most people, it is a condition of your mortgage contract and failure to maintain insurance on the home could lead to a mortgage default. The basic policy is designed to provide protection for the physical structures on your property.
Should they suffer damage caused the severe weather that frequently strikes in the Dallas-Fort Worth region of North Texas, many homeowners rely on those policies to repair storm damage or rebuild their homes if they were destroyed by a tornado. Having a homeowner’s policy provides the comforting thought that if your home suffers significant damage, you would not have to attempt to pay for the repairs out of your own pocket.
But one aspect many homeowners fail to understand until they receive a Notice of Cancellation or Nonrenewal from their insurer is that claims on your policy can have a detrimental effect on your status as a policyholder.
If you make too many claims in a given year or too large a claim, it may place you in the position of having your policy canceled by the insurer. Having too small a deductible can leave a homeowner feeling as if they should make a claim every time they suffer any damage.
This may not be a good idea, as your policy costs more for the low deductible, and frequent claims could trigger a cancellation. It could also lead to delays or even a bad-faith refusal to pay a claim, as the insurer may attempt to characterize your claims as fraudulent. This could delay your repairing or rebuilding your home and force you to sue your insurer in an effort to obtain the coverage for which you have paid.
