(800) 253-14825 Insurance Laws Homeowners in Missouri Need to Know
Summary: Owning a home in Missouri comes with some important insurance laws worth knowing to protect yourself as a homeowner. While the Show Me State doesn’t require homeowners insurance, most mortgage lenders do, and having coverage can save you big after a disaster. State law protects homeowners from unfair claim denials, offers grace periods for late payments, and lets you keep leftover claim money in some circumstances (if you’re honest). Insurers also have to follow fair notice rules when canceling or not renewing policies. Estimated Read Time: 5 mins
Understanding Missouri homeowners insurance laws is important for anyone who owns a home and resides in the Show Me State. There are many different laws involving the rights of property owners, and knowing some of the regulations in place can help you best protect yourself. From enrollment to cancellation, here are five great legal issues involving your home insurance that everyone should know.
Is Homeowners Insurance Required by Law in Missouri?
There is no law mandating that homeowners have an insurance policy on their homes in Missouri. However, there are a few important points to remember:
- If you are using a mortgage to purchase your home, it’s more than likely required that you maintain a homeowners insurance policy as a condition of the loan.
- All homeowners are encouraged to keep a home insurance policy for their home, as the cost of rebuilding after a major or total loss is often too great for anyone to overcome alone.
Even without a legal requirement, it’s a wise choice to have homeowners insurance no matter the situation.
Missouri’s Vexatious Refusal Law
Understanding your rights as a homeowner is key because, unfortunately, not everyone acts in good faith.
If your insurance company unfairly refuses to pay your claim in Missouri, you may have the right to sue them under the state’s vexatious refusal law.
This home insurance law protects homeowners from insurance companies that delay or deny claims without a good reason.
Insurance companies that take over 30 days to pay your claim and don’t have a legitimate excuse could be required to provide you with extra compensation, including damages and attorney fees.
Courts expect home insurance companies to properly investigate claims and pay when required, not drag their feet, hoping to find a reason to deny coverage later.
Even if your carrier eventually pays, you can still pursue legal action if they caused unnecessary delays due to vexatious refusal.
Missouri law allows up to five years to file a vexatious refusal claim, or up to ten years if you’re suing for breach of contract.
Tip: While finding the lowest home insurance rate is important, this is a prime example of why who you enroll with also matters. There’s nothing wrong with saving a buck, but always compare your options to be sure your carrier is a top-rated, trusted homeowners insurance carrier capable and willing to be there when you need them the most.
The Missouri Grace Period
If you miss a homeowners insurance payment in Missouri, don’t panic—most policies include a 10-day grace period.
This means that even if you do pay your premium late, your coverage stays active during this time.
However, you may have to pay a late fee, and it’s worth noting that repeated offenses could lead to your carrier refusing to renew your coverage in the future.
If you still haven’t paid after the grace period, your insurer can cancel your policy, but they must give you at least 10 days' notice.
Once your policy has been active for 60 days, cancellation is only allowed for serious reasons like nonpayment, fraud, or misrepresentation, and your insurer must provide 60 days’ notice unless it’s due to nonpayment.
If your policy lapses, you may be able to reinstate it by paying what you owe plus any late fees, depending on your insurer.
To avoid coverage gaps, paying on time or contacting your insurer if you need help is always the best course of action.
Missouri Law Allows Homeowners to Keep Profits
Depending on the nature of your claim and your home insurance company, you may be in charge of handling the money you receive for reimbursement after filing a claim.
In Missouri, the law allows homeowners to keep unused claim money, so long as they are honest about the nature of the claim.
Lying to get a bigger payout is insurance fraud, which comes with serious consequences in Missouri, including being charged with a misdemeanor or a felony, thousands of dollars in fines, and spending up to four years in prison.
If you receive the payout directly, you can choose your own contractors and materials, which may leave you with extra cash if you go with cheaper options.
However, if the payment goes to your lender, you likely won’t have access to any leftover funds.
Keep in mind that while cutting costs may seem like a good idea, it can often come back to haunt you.
Particularly when it involves hiring unlicensed or shady contractors just to save money.
This can lead to poor-quality repairs, safety risks, and even legal trouble—most insurance companies will deny future claims if the loss is related to work conducted by an unlicensed contractor.
In the long run, bad work can cost you way more than doing it right the first time. If you can shop around and find a licensed option that provides you with a profit, honestly, it’s fair play, but other means could leave you in a worse position.
How Missouri Handles Non-Renewals and Cancellations
In Missouri, homeowners are protected by laws that govern when insurance companies can cancel or not renew a policy. To be clear, your policy can still be denied renewal or cancelled, but only under certain parameters.
For example, insurers must give you 30 to 60 days' notice and can only cancel for valid reasons, like non-payment or fraud.
Your carrier must also treat you fairly, explaining their decision and letting you address any issues. If your policy is canceled or non-renewed, you have the right to appeal.
If you choose to go this route, the insurer must provide information on how to appeal and consider any new details you offer.
These homeowners insurance laws are in place to make sure you’re treated fairly and have a chance to resolve things before losing coverage.
Read Next: How to Cancel a Home Insurance Policy in Missouri
