Homeowner's insurance offers financial compensation if your home is damaged or destroyed as the result of a natural disaster or accident. Because it is difficult to overcome the financial burden of replacing or repairing your home out of pocket, most mortgage companies require borrowers to have a homeowner's insurance policy. Finding homeowner's insurance may be more challenging, but it is still possible, if you have a felony record.
Laws and Regulations
Because insurance is regulated on the state level, each state has its own laws regarding homeowner's insurance. However, in some states, including Michigan, you can be denied a homeowner's insurance policy because you have certain felony convictions, according to the Michigan Office of Financial and Insurance Regulation. If you already have homeowner's insurance, most state laws forbid insurance companies from canceling your policy except in a few specific cases, such as if you lied about your felony conviction on your application, commit a crime that puts your home in danger or don't make your payments. When the term is up, the company can refuse to renew your policy for any reason, including felony conviction.
Denial Due to Felony Conviction
Insurance companies are less likely to offer insurance if they believe your home is at risk of damage. If you were convicted of a felony that might put your home at risk, such as arson or the use of explosives, an insurance company may deny your application, according to Michigan's Office of Financial and Insurance Regulation. The office also notes that the insurance company might deny your policy if the property you are hoping to insure is used for "illegal purposes."
Poor Credit and Insurance Denial
If you have been incarcerated, your credit score has probably been affected because you were unable to establish a credit history or make payments. Homeowner's insurance companies may deny your application or raise your rate if your credit score is low.
Homeowner's insurance laws differ from state to state, and policies vary widely from company to company. If the first few applications you submit are denied, meet with an insurance agent. She can help you understand why you were denied and help you find a company willing to extend coverage.
- State Corporation Commission: Know Your Rights Regarding Homeowners Insurance
- DaveRamesy.com: Can Your Home Insurance Be Denied?
- Illinois Legal Aid: What You Should Know About Homeowners Insurance
- InsWeb: Can an Insurer Suddenly Cancel Your Policy?
- Progressive: Homeowners Insurance FAQ
- Michigan Office of Financial and Insurance Regulation: Homeowners Insurance: Are You Eligible
Miranda Morley is an educator, business consultant and owner of a copywriting/social-media management company. Her work has been featured in the "Boston Literary Magazine," "Subversify Magazine" and "American Builder's Quarterly." Morley has a B.A. in English, political science and international relations. She is completing her M.A. in rhetoric and composition from Purdue University Calumet.