{"id":2027,"date":"2025-07-31T20:51:47","date_gmt":"2025-07-31T20:51:47","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/07\/31\/home-insurers-are-demanding-policyholders-make-home-updates-to-keep-coverage-heres-why-theyre-cracking-down-bankrate\/"},"modified":"2025-07-31T20:51:47","modified_gmt":"2025-07-31T20:51:47","slug":"home-insurers-are-demanding-policyholders-make-home-updates-to-keep-coverage-heres-why-theyre-cracking-down-bankrate","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/07\/31\/home-insurers-are-demanding-policyholders-make-home-updates-to-keep-coverage-heres-why-theyre-cracking-down-bankrate\/","title":{"rendered":"Home Insurers Are Demanding Policyholders Make Home Updates To Keep Coverage. Here\u2019s Why They\u2019re Cracking Down. | Bankrate"},"content":{"rendered":"
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\u201cInsurance carriers are, for the most part, for-profit companies,\u201d I declare to my risk management and insurance students. \u201cThey are allowed to make a profit. Does this shock you?\u201d<\/p>\n

Most students are surprised \u2014 especially after seeing headlines about insurance companies earning billions while raising policyholders\u2019 premiums to record highs. But there\u2019s a fundamental misunderstanding about how insurance works. Carriers pay for covered, accidental losses \u2014 not expected or routine maintenance repairs. Homeowners insurance isn\u2019t a warranty contract.<\/p>\n

Yet, insurers are increasingly asking homeowners to make upgrades or repairs on their end as a condition to renew their policies. These requests are to help mitigate risk that could end up causing a future claim. Sometimes the request is minor, like trimming a tree to avoid future damage from a falling limb. Other times, the request can cost thousands of dollars, like replacing a roof to prevent it from eventually leaking during a storm.<\/p>\n

If you\u2019ve received a letter from your insurance company asking for updates, you\u2019re not alone. Rising claims costs and growing catastrophe losses have prompted insurers to re-evaluate older homes, higher-risk properties and regions with frequent storm activity \u2014 the homes that have a higher chance of filing an insurance claim. In some cases, your policy may not be renewed unless the requested changes are made, or you may end up with an endorsement that restricts claims payment.<\/p>\n

Can my insurer ask me to make home updates?<\/h2>\n

The short answer is \u201cyes.\u201d<\/p>\n

Despite being in the risk management business, insurance companies are fundamentally risk-adverse. They don\u2019t want to underwrite properties associated with moral hazards. That\u2019s when a homeowner becomes more careless with their property because someone else, in this case the insurer, will bear the cost of a covered claim.<\/p>\n

Insurers must walk a fine line: pricing premiums fairly across similar risks, collecting enough to cover losses and expenses, but not charging so much that the policy becomes unaffordable or uncompetitive. It\u2019s a delicate balancing act \u2014 one that\u2019s become harder in recent years.<\/p>\n

Homeowners insurance is not guaranteed. Every company uses underwriting guidelines \u2014 internal rules that help determine which properties meet its risk standards. And those guidelines have tightened. In 2023, property insurers spent an average of $1.10 for every $1 they collected in premiums. That\u2019s not sustainable. In fact, over the past 20 years, the property insurance industry has only turned a profit in eight of those years.<\/p>\n

To get back to financial stability, many insurers are now requiring policyholders to play a more active role in risk management and loss control. That means making repairs or replacements to reduce the likelihood of a claim.<\/p>\n

Often, this request comes shortly before the policy renews. You may not remember exactly what information you gave when applying for coverage, but the insurer used those details to determine your premium. Now, they\u2019re using updated data \u2014 from inspections, public records or prior claims \u2014 to reassess the risk and possibly raise your rates or require action.<\/p>\n

For example, if your water heater was installed 35 years ago, the chance of it failing and causing water damage is much higher than average. To keep coverage in place \u2014 and to prevent widespread rate increases across the customer base \u2014 the insurer might ask you to replace it.<\/p>\n

You may receive a conditional renewal notice, meaning your policy will continue if the changes are made. Or you might get a nonrenewal notice stating your coverage will end at the conclusion of your current term if the issues aren\u2019t addressed.<\/p>\n

In most states, insurers must give advance notice \u2014 often 30 days or more \u2014 before a home insurance policy expires. If the insurer has a condition for continued coverage, the request should include the reason for the action and a list of items the company wants addressed.<\/p>\n

What updates can my insurer ask me to make?<\/h2>\n

Update requests can range from cosmetic touch-ups to significant upgrades. Common examples include:<\/p>\n