Insurance Notice of Cancellation Letter

It isn’t uncommon for a homeowner in Florida to receive an insurance notice of cancellation letter from their insurance company but when it happens it sends folks into a panic. The agent and/or the homeowner will usually start by calling your home inspector that completes the 4 Point and/or Wind Mitigation inspection.

Let’s step back and talk about how insurance policies are written and each participant’s role in a real estate transaction.

Example Scenario:

1. The buyer is purchasing a property and needs insurance.
2. Prior to an insurance company in Florida writing and bidding a policy, the buyer has to provide the insurance company with a 4 point inspection and wind mitigation form. The 4 point gives the underwriter visibility of the condition of the home on the day of the inspection and determines if it is eligible to have a policy written according to their criteria. The wind mitigation from OIR-1802 is used to determine what wind protection is installed on the property and the underwriter will give discounts accordingly. This varies between counties and HVHZ zones and insurance companies.
3. The buyer, real estate agent, or insurance will make arrangements with a home inspection company to complete the required inspections. The cost varies on average between $150 to $250 for both forms for a typical size home in Florida. < 2000 square feet.
4. Once the inspections are complete the real estate agent or home buyer will submit them to the insurance agent for review. Any unsatisfactory items will in most cases need to be resolved before a policy can be bound.
5. 6 months pass and the inspections are reviewed again to do a quality check by the underwriters quality control department to ensure the discounts issued on a policy are valid. If they deem there is an issue, they will issue an insurance notice of cancellation letter to the agent and their client.
6. The home inspector will be notified and they should work to assist in resolving the issue if the home inspector can with better pictures needed being the typical issue or pictures of an inaccessible area or component that took place on the day of the inspection.
7. The forms will be updated and returned to the homeowner and/or the insurance agent to resubmit.
8. Once the underwriter reviews, they will make a decision to remove the insurance notice of cancellation and the policy will continue on as planned.
9. This process can take anywhere between 1 hour to a few days depending on the issue that needs to be addressed.

Here is an example of an insurance notice of cancellation: 

From: xxxxxx <[email protected]>
Date: October 12, 2021 at 5:43:47 PM EDT
To: [email protected]
Subject: Non-Renewal due to Additional Items Requested That Was Not Received

Hi Ron,

I hope that you and your family are doing well!

I wanted to reach out to you in regard to the non-renewal letter that Citizens sent to you due to the additional items requested that were not received.

The items needed are the following:

4pt must include the 2nd electrical panel info and 2nd roofing info(over the front part of home/enclosed section) by the inspector. Then he must date and initial next to each area.

Photos show boarded windows/doors. Please upload photos showing the windows are not broken.

Please provide a new photo of the larger electrical panel with the cover off showing all the wires in order to verify no double taps as the provided photo has a shadow over a portion of the wiring and must be verified.

Conclusion: 

In the example above the insurance company was seeking additional information and if the information isn’t received in a defined period then the policy moves forward with cancellation. Please don’t delay reaching out to your insurance company when you are notified and hopefully, your insurance agent won’t either to ensure there is sufficient time for the inspector to respond and assist.

Final thought, unfortunately all conditions are not always favorable for the inspector on the day of the inspection that may cause pictures to not be taken or the quality to be poor. I wish I could say they will always nail it or we will but it just isn’t true. Be patient and work to resolve and concerns together. In the example above we had to get back out to the property and complete another inspection but it was done within 24 hours of contact and the policy continued on without lapse. These things happen and everything typically works out. We have yet to have a policy get canceled due to the inspection.

If you have additional questions and want to contact GGR Home Inspections, please send us a note, text, or call.