'But It's Not My Fault!': Your Insurance Company Absolutely Will Blame You in These Five Scenarios

Insurance companies care about 'fault' in more ways than you think — from payment mishaps to your neighbor's landscaping — so it's on you to manage the risks, even the ones that don't seem like your problem.

By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS

published 14 November 2025

in Features

A man has his hands up and looks annoyed, as if he's saying, "But it's not my fault."

(Image credit: Getty Images)

Insurance companies care about fault. And I mean fault in almost every way conceivable.

Let me highlight five ways in which fault matters and what you can do (in some of the cases) to help ensure that you don't get canceled by your insurance company.

1. Premium payments

Whether you pay your insurance bills online or by mail or you walk through the door of your insurer's office and hand over cash (yes, some clients do this), paying your premium is your responsibility.

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Even if your bank fails to send the payment you set up through them, while it may not be your fault, your insurance company will most likely hold you responsible (there could be some exceptions, though).

Same deal with your credit card. Say you have to cancel your card because you lost it or it was stolen, and then you forget to update your payment info with the insurer. If a premium payment gets kicked back because the account is no longer active, that is on you.

What you can do: Ensure all payment info is up to date when you set up the payment and check to make sure the payment was made on the date that you requested.

2. Risks to your home

If your next-door neighbor doesn't maintain their landscaping and that results in a tree hanging over your house, your insurance company will likely see that as a risk they do not want to take and non-renew you.

It may not be your fault — it is not even your tree — but if the tree could fall on your house or catch fire in a wildfire, that makes you a higher risk.

What you can do: Unfortunately, there's not much you can do here other than politely ask your neighbor to address whatever landscaping is putting your property at risk. The key word here is "politely."

3. Application mistakes

You may not be the one who completes your insurance applications. Your significant other might do it, for example. Or you may have an assistant who does it if you are a small-business owner. Maybe all you do is sign the insurance applications.

But what if that other person makes a mistake on the application? What if they list something materially wrong that would impact whether you would qualify for the insurance plan at a particular price?

Well, it doesn't matter. Your John Hancock at the bottom of the form confirms you understand and agree with everything above. The mistake isn't your fault, but you own it with your signature.

What you can do: Make sure you carefully read over any applications before you sign them.

4. Concentration risk

An aggressive insurance company writes up a ton of business in your neck of the woods. It seems like everyone on the street has insurance with the same insurer because someone at the company identified your area as a good one to insure, and life is good.

Unfortunately, that person leaves the company, and her replacement sees only one thing — a high concentration of risk in the same area.

Chances are, the new person is going to start removing some of those risks so the company is not in the position that one large loss in your area could set its claims pocketbooks on fire.

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Not your fault — you didn't decide to approve all of your neighbors with the same insurance company, but you may still get a non-renewal notice.

What you can do: Not much you can do here, since you might not know that you and all of your neighbors have the same insurer.

5. Conflicting narratives after an incident

After being involved in a car accident, you might note that at least all involved are fully intact, except maybe the vehicles. Your next thought may be that this mess wasn't your fault.

Determining fault in a car accident can be a real challenge. What may seem cut-and-dried to you may not seem the same to the insurance company. If it comes down to "he said, she said, they said," what happens then?

You may be looking at a 50/50 determination of fault, and guess what? That means what happened is at least half your fault.

What you can do: The best thing you can do to be proactive here is to drive carefully.

The bottom line is, even when something seems completely out of your control, your insurer expects you to be proactive about managing the risk.

By double-checking your payment details, addressing potential hazards to your home and reading every document before signing, you can make it harder for your insurer to decide you're too risky to keep around.

Want to learn more about insurance? Visit icgs.org.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Karl Susman is a veteran insurance agency principal, nationally engaged insurance expert witness and broadcast host who translates insurance from jargon to judgment. For more than three decades, he's helped consumers, courts and policymakers navigate coverage, claims and compliance. As Principal of Susman Insurance Agency, Karl works directly with households and businesses to compare options and make clear, defensible coverage decisions.