Home is the place where we live, flourish and collapse, or we can say that- it is a treasure of emotions that we experience during our lifetime.
All of us have an intimate bond with every single wall of our home and because of this reason; no one wants to take any risk with the security of the home.
One can reduce the risk associated with the different assets of the home by availing homeowners insurance. And if you take such insurance, then there may be a chance that you want to terminate it in the middle due to a high premium, scant compensation, opaque policies or other any reason.
The present article will inform you about different aspects of homeowners insurance cancellation letters.
What Is Homeowners Insurance?
If you are familiar with the term “homeowners insurance” then let’s try to understand its meaning first.
Homeowners insurance is a term used for a comprehensive insurance plan that provides coverage for the damaged furniture, interior and exterior, belongings, etc. Sometimes it may include coverage for the persons inside the house and pets as well.
If these assets get damaged because of fire, accident, or any other mishap, then you can claim for the compensation under a homeowners insurance plan.
Why Do You Need to Cancel A Homeowners Insurance?
Homeowners insurance is like any other insurance plan; the area of coverage may vary with insurance providers and premium paid. Hence it is advisable to compare the plans offered by different companies thoroughly, before selecting anyone.
Usually, we take such decisions prudently, but human beings are prone to make errors.
What if the plan selected by you is not the ideal one for you?
What if after a few months or years, you find a more comprehensive homeowners insurance plan in the market where you need to pay a less premium? In such a case you can cancel the existing policy and switch to a fresh one.
Does a Policyholder Have the Right to Cancel the Plan Anytime?
Yes, being an owner, it is the right of every policyholder to end the insurance plan whenever he or she wants to do so. This is so straightforward.
However, the procedure of termination of an insurance plan is not simple and is time consuming and requires some formalities.
The first thing you have to do is to draft a homeowners insurance cancellation letter and send it to the appropriate authorities.
Every policy has a lock-in period which varies from company to company.
After this duration, if the insurer approves your request then you will receive an acknowledgement regarding the termination of the insurance policy. And if they find your application unsatisfactory, then also they will inform you.
Important Points to Consider While Writing a Homeowners Insurance Cancellation Letter
First and most important thing is to read the policy document carefully before initiating the process of cancellation. Different insurance companies have different norms regarding the cancellation procedure.
If you find that your insurance provider allows a termination of the plan with some conditions then you should follow the guidelines.
There is a possibility of incurring a monetary penalty at the time of terminating. Hence it is better to examine the policy brochure carefully before initiating the process.
Usually, an insurance termination letter is addressed to the Zonal or Regional Manager of the insurance company. If you don’t know the name and designation of the concerned authority, then you can start with “To Whomsoever It May Concern”.
It is a professional/business letter so you need to be careful about the selection of words and other details.
If you put too many details in the letter like your family background, financial status, health issues then it would become very difficult for the authority to read it completely. Hence it is advisable to keep the letter precise.
Mention a valid reason in the letter. Otherwise your request may be considered incomplete.
The subject of the letter should be very clear that you want to end homeowners insurance.
The ideal length of such a letter is around 150 to 200 words (2-3 paragraphs).
Enclose a photocopy of policy documents with your letter.
Keep a photocopy of your letter for future correspondence.
Only the policyholder may cancel the policy. If you want to authorize someone for the process, enclose an authorization letter.
One should send the cancellation letter via registered mail id and request for a return receipt.
If you have already paid the advance premiums, then do not forget to ask for a refund in the letter.
Last but not least, proofread the letter two times before mailing.
Why Do You Need an Insurance Cancellation Letter?
After reading this extensive list of instructions you may think that it would be better to make a phone call or drop a text message to the insurance agent for the cancellation rather than drafting a letter.
You should not opt for such shortcuts as insurance is a legal contract between two parties and if you want to terminate the contract, then you should send a proper notice to the insurer.
Now you have the complete idea of the procedure of cancellation of homeowners insurance. We have discussed its significance and important points that need to be covered in the cancellation letter.
Writing a legal document is difficult. Hence it is understandable that many people find it difficult to draft a cancellation letter on their own.
If you are facing the same difficulty, then you can either outsource the service to a professional writer or follow the sample format of a homeowners insurance cancellation letter shared below.
Sample for Homeowners Insurance Cancellation Letter
(Your name and address)
The Regional Manager
Sample Home Insurance Company
(Address of the insurer)
Subject – Regarding the cancellation of homeowners insurance.
Dear Sir / Madam,
This is to inform you that, I (Meenal Shah) wanted to terminate my homeowners insurance (Policy no.- XXXXX) with an immediate effect as I am not satisfied with the amount of compensation that I had received for the fire accident last month (details of compensation are attached).
Along with that, I also request you to refund my advanced premium for six months in the linked bank account (a canceled check is attached)
Kindly, take the needful action into this matter as early as possible. Feel free to contact me in case of any clarification.
Thanks and regards
(Your signature and contact details)
The procedure of termination of any kind of insurance policy is not simple and some of you may face several difficulties in this task. If you have any good experience related to such a procedure, feel free to share it with us in the comments section, also do not forget to share this article if you find it informative.