If you’re having trouble getting a renter’s insurance policy, here’s what you can do about it
Key takeaways:
- There are many reasons why renters could be denied insurance
- Your landlord may be partly to blame
- You have options when trying to rectify the situation
Whether it’s paint chips falling from the kitchen ceiling or burst pipes on a cold winter night, your landlord is responsible for the condition and maintenance of your rented apartment or house. But if those broken pipes leak onto your bedspread or other personal property, the damage to your belongings becomes your problem.
In addition to providing coverage for personal property in case of damage or theft, renters insurance gives you liability protection in case someone is injured onsite. It can also kick in for additional living expenses if you have to temporarily move out of your rental. But not every rental insurance application goes through. So before you go looking for a policy, let’s walk through the reasons you could be denied and how to avoid that unpleasant scenario.
Location, location, location
Sometimes the most obvious reason for denial of renters insurance is your street address. If you live in an area prone to natural disasters, such as hurricanes in south Florida or wildfires in northern California, the risk of an incident where your insurer will need to pay a claim may be higher than normal. When risk goes up, insurers get nervous, and they may raise their rates or deny a policy altogether.
This can also be true for apartments or houses in rural areas that are far from a fire station. If you’re considering a new rental, check the Fire Suppression Rating Schedule (FSRS) for information about the neighborhood.
Hazards in the home
At first glance, it may seem great to have a trampoline or pool at your place. Your friends can’t stop texting you asking to come over and hang. But all it takes is one slip on a wet surface or one twisted ankle from an awkward straddle jump to make insurance companies classify these perks as hazards and deny coverage.
Another potential home hazard is deferred maintenance. When was the last time the landlord cleaned the gutters? What about rusty fire escapes, leaky roofs, or old windows? Individually, these issues may seem like minor nuisances, but collectively they can add up to a red flag for potential insurers.
Previous claims
It’s a simple rule of insurance – file a claim, and your policy gets more expensive. File enough claims and potential insurers see an irresponsible tenant who’s too risky to cover. In that case, it may be nearly impossible to get a policy.
Be prepared to give three to five years of claims history when applying for renters insurance, including the date of filing, the type of claim, and details on the severity of the incident. It’s also worth noting that the type of claims matter almost as much as the quantity of claims. Claims that stem from lawsuits involving personal injury, animal bites, or other safety hazards might raise an insurer’s eyebrows.
Animals in the home
Your landlord may allow pets, but that doesn’t mean it’ll all be smooth sailing for you and Fido. Not all dog breeds are necessarily seen as adorable – some are more aggressive than others. So give your insurer the heads-up or they may not sign off on your policy. Some offer dog bite exceptions, allowing you to purchase a plan with the understanding that the insurer won’t cover any liability posed by your four-legged friend.
A lapse in coverage
Your renters insurance could lapse for any number of reasons. Maybe you fell behind on payments. Maybe you switched policies and there was some lag time in between. Or maybe your insurer canceled your plan. Whatever the case, a lapsed policy can make it hard – but not impossible – to get another one. Many insurers also have grace periods that allow you to come back on a policy after it lapses.
Your financial or credit history
A renters insurance application starts a process that includes a check on your credit and claims history. If you have a record of multiple claims and/or recent claims, that could put you in a high-risk category. A low credit score also makes you a risk. Luckily, there are a few things you can do to avoid this issue:
- Look into your credit score and make sure it’s correct. If something looks wrong, you can dispute it with the credit reporting company.
- Check that your claim history is correct, specifically your C.L.U.E. (Comprehensive Loss Underwriting Exchange). You can petition to correct this, too.
- If there are special circumstances that led to a major shift in your credit score, such as divorce, you can ask for reconsideration.
You’ll have to submit most of these requests in writing, so resolving these issues may take time.
Your criminal history
A key element that every insurer expects from its policyholders is that they be trustworthy. If you have criminal offenses in your past, this may make it less likely that they will approve your application, particularly if the crime was property-related, such as misuse, arson, or any other form of destruction.
It may not be your fault
Sometimes the reasons for a rejected renters insurance application have nothing to do with you. The home itself may be structurally unsound or the landlord may have a bad reputation or there may be other factors beyond your control. Also, not all underwriters look at a piece of property the same way. What’s fine for one may be unacceptable to another, and vice versa.
You have options
If you get turned down for rental insurance, you can always try again with another company. There are many options out there, so compare rates to get the best possible deal. Further good news is that you’re not alone in this process. A trusted insurer can be a valuable partner for finding insurance that’s right for you. The team at NICRIS Insurance stands ready to provide a free, personalized review that can pair you with the right policy.