Which of the following factors may lead to a homeowner's insurance policy being non-renewed?

Which of the following factors may lead to a homeowner's insurance policy being non-renewed?

• A. Frequent claims
• B. Low credit score
• C. High deductible
• D. Type of dwelling

Answer: (A)

Frequent claims can significantly influence a homeowner's insurance policy being non-renewed. Insurers often view frequent claims as indicative of higher risk. When a policyholder submits multiple claims over a short period, it raises concerns for the insurer about the likelihood of future claims. As a result, insurers may decide not to renew the policy to mitigate their risk and maintain a profitable underwriting balance. In contrast, low credit scores and high deductibles may affect the underwriting process and the premiums charged but are not typically grounds for non-renewal. Similarly, the type of dwelling influences coverage options and costs but is not alone a reason for non-renewal, especially if the dwelling meets the insurer's risk criteria.

Frequent claims can significantly influence a homeowner's insurance policy being non-renewed. Insurers often view frequent claims as indicative of higher risk. When a policyholder submits multiple claims over a short period, it raises concerns for the insurer about the likelihood of future claims. As a result, insurers may decide not to renew the policy to mitigate their risk and maintain a profitable underwriting balance.

In contrast, low credit scores and high deductibles may affect the underwriting process and the premiums charged but are not typically grounds for non-renewal. Similarly, the type of dwelling influences coverage options and costs but is not alone a reason for non-renewal, especially if the dwelling meets the insurer's risk criteria.