Virginia homeowners insurance laws don’t force you to buy a policy, but they tightly regulate the insurers that sell one. Title 38.2 of the Virginia Code and the State Corporation Commission’s Bureau of Insurance control what a homeowners policy must cover, how insurers price it, when they can cancel or refuse to renew, and how they handle your claim. If you have a mortgage, your lender almost certainly requires coverage even though the state does not.
Is Homeowners Insurance Required in Virginia
No Virginia statute makes homeowners insurance mandatory. The requirement comes from your mortgage lender, which typically demands coverage at least equal to the home’s replacement cost for the life of the loan. Own the home outright and you can legally go without a policy, absorbing any fire, storm, or liability loss yourself.
Federal law adds a layer if your property sits in a FEMA-designated Special Flood Hazard Area. The National Flood Insurance Act requires regulated lenders to verify flood insurance before making or renewing a loan on high-risk property.1FEMA. Flood Insurance Rules and Legislation Standard homeowners policies do not cover flooding, so that means a separate policy through the National Flood Insurance Program or a private carrier.
What a Virginia Homeowners Policy Must Cover
The state’s administrative code sets a floor. Under 14VAC5-342-40, every homeowners policy sold in Virginia must cover the dwelling and its fixtures, other structures on the property, household and personal property anywhere in the world, and debris removal after a covered loss.2Virginia Code Commission. 14VAC5-342-40 – Mandatory Property Coverages Most policies also bundle in liability protection and additional living expenses if a covered event displaces you.
The common HO-3 form covers the dwelling on an open-perils basis (everything except what the policy excludes) but covers personal property only for named perils listed in the policy. An HO-5 extends open-perils treatment to personal property as well. It costs more and leaves fewer gaps.
Virginia also requires insurers to offer ordinance or law coverage, either built in or as an endorsement. Under 14VAC5-341-40, the coverage must be offered at the dwelling’s full limit of liability and sits on top of the dwelling limit itself.3Virginia Code Commission. 14VAC5-341-40 – Mandatory Property Coverages Code upgrades after a major loss can add tens of thousands to a rebuild, so this matters.
Replacement Cost or Actual Cash Value
Virginia law does not mandate one valuation method. Replacement cost pays what it takes to repair or replace damaged property with similar materials, no deduction for age or wear. Actual cash value subtracts depreciation. On a 15-year-old roof with $10,000 in damage, a replacement cost policy pays the full repair minus the deductible; an actual cash value policy reduces the payout to reflect wear. Check which your policy uses before you need it.
What Standard Policies Don’t Cover
Even a broad policy carries exclusions that catch owners off guard:
- Flooding is never covered under a standard homeowners policy, in or out of a flood zone.1FEMA. Flood Insurance Rules and Legislation
- Earth movement, including earthquakes, sinkholes, and landslides, requires a separate endorsement.
- Maintenance failures such as neglect, mold, pest damage, and gradual deterioration are excluded. A pipe that has been leaking for months and finally causes rot is the classic example.
- Intentional acts by the policyholder, including arson and fraud, are excluded.
- War and nuclear hazards are universally excluded.
How Insurers Can Use Your Credit
Virginia Code 38.2-2126 controls insurer use of credit information for homeowners coverage. Before pulling your credit, the insurer must disclose on the application or when it is taken that credit information will be obtained, and must tell you that you can request an update and ask for reevaluation based on corrected data.4Virginia Code Commission. Virginia Code 38.2-2126 – Insurance Credit Score Disclosure
If an insurer takes an adverse action based on credit, such as denying coverage, charging a higher rate, or placing you in a less favorable tier, it must notify you and either explain the primary factors or tell you that you can request that information.4Virginia Code Commission. Virginia Code 38.2-2126 – Insurance Credit Score Disclosure
Certain factors are off-limits entirely: disputed information that would produce an adverse action, medical collection accounts, insurance-related inquiries, and multiple mortgage or auto loan inquiries made within 30 days of each other. Insurers also cannot use income, gender, address, zip code, race, religion, marital status, or national origin as credit criteria.4Virginia Code Commission. Virginia Code 38.2-2126 – Insurance Credit Score Disclosure
How Rates Are Regulated
Virginia Code 38.2-1904 sets three baseline standards for homeowners rates: they cannot be excessive, inadequate, or unfairly discriminatory.5Virginia Code Commission. Virginia Code 38.2-1904 – Rate Standards A rate is not excessive unless it is unreasonably high and reasonable competition is missing for that classification. A rate is unfairly discriminatory only when the difference between what two policyholders pay lacks an actuarial basis or connection to actual experience.
When reviewing rates, the Bureau of Insurance weighs loss experience inside and outside Virginia, catastrophe hazards, underwriting profit margins, investment income, and dividends returned to policyholders.5Virginia Code Commission. Virginia Code 38.2-1904 – Rate Standards Premiums typically reflect your home’s location, construction type, claims history, and credit score. Insurers must disclose available discounts (security systems, newer roofing, multi-policy bundles) when you ask, and they cannot raise your rate solely because you inquired about coverage without filing an actual claim.
Shut out of the voluntary market? The Virginia Property Insurance Association has served as an insurer of last resort since 1968 for individuals and businesses that cannot obtain coverage elsewhere.6Virginia Property Insurance Association. Virginia Property Insurance Association Its policies generally cost more and cover less, so treat it as a backstop.
Cancellation and Nonrenewal Rules
Virginia Code 38.2-2114 limits when and how an insurer can terminate an owner-occupied homeowners policy. Cancellation or nonrenewal requires at least 30 days’ written notice before the termination date. Nonpayment of premium is the exception, requiring only 10 days’ notice.7Virginia Code Commission. Virginia Code 38.2-2114 – Grounds and Procedure for Termination
The notice must go out by registered mail, certified mail, or another first-class tracking method approved by the U.S. Postal Service, and the insurer must keep proof of mailing and a copy for at least one year.8Virginia Code Commission. Virginia Code 38.2-2113 – Mailing or Electronic Delivery of Notice Electronic delivery is allowed if the insurer keeps evidence of the transmission.
The notice must state the reason for cancellation and inform you of your right to request review by the Commissioner of Insurance. Mid-term cancellations are restricted to specific grounds: nonpayment, material misrepresentation on the application, or a substantial change in the risk insured.7Virginia Code Commission. Virginia Code 38.2-2114 – Grounds and Procedure for Termination If you think a cancellation or nonrenewal violates the law, the Bureau of Insurance will take the complaint.
Your Rights When You File a Claim
Report a loss promptly. Most policies require it, and delay gives the insurer grounds to deny. Virginia Code 38.2-510 requires insurers to acknowledge claims communications reasonably promptly and to adopt standards for prompt investigation.9Virginia Code Commission. Virginia Code 38.2-510 – Unfair Claim Settlement Practices Insurers that stall or ignore policyholders can face regulatory action under the state’s unfair claim settlement practices law.
Document everything: photos of the damage, contractor estimates, receipts for emergency repairs that prevented further damage, and an inventory of damaged personal property. If the insurer requires a sworn proof of loss, Virginia law says it must send you the forms within 15 days of your written request. Miss that deadline and the proof of loss requirement is waived entirely.10Virginia Code Commission. Virginia Code 38.2-320 – Insurer to Furnish Forms for Proof of Loss
No policy provision can shorten your time to sue to less than one year after the loss. Time spent in settlement negotiations does not count against that deadline.11Virginia Code Commission. Virginia Code 38.2-314 – Limitation of Action and Proof of Loss
Public Adjusters
If you feel overmatched, you can hire a public adjuster to handle the claim on your behalf, typically on contingency. Virginia Code 38.2-1845.14 requires public adjuster fees to be fair and reasonable in relation to the work performed. During a catastrophic disaster, the law caps fees at 10% of the settlement, including any expenses the adjuster incurs.12Virginia Code Commission. Virginia Code 38.2-1845.14 – Fees Outside a declared disaster there is no fixed percentage cap, but the fair-and-reasonable standard lets regulators act against excessive charges.
Lender-Placed Insurance
If your coverage lapses, or your lender thinks it has, the servicer can buy a policy on your behalf and bill you. Force-placed insurance almost always costs more than a policy you’d buy yourself, and it typically protects only the lender’s interest in the structure, leaving your personal property and liability uncovered.
Federal Regulation X (12 CFR 1024.37) requires your servicer to send written notice at least 45 days before charging you for a force-placed policy.13Consumer Financial Protection Bureau. 12 CFR 1024.37 – Force-Placed Insurance A second notice must follow, and the servicer cannot charge you until at least 15 days after that second notice, and only if you haven’t provided proof of your own coverage. If you reinstate your own policy inside that window, the servicer must cancel the force-placed policy and refund any overlapping premium. Respond to a force-placement notice immediately with proof of coverage.
If Your Insurer Becomes Insolvent
The Virginia Property and Casualty Insurance Guaranty Association covers unpaid claims when a licensed insurer is declared insolvent, up to $300,000 per claimant for most covered claims, plus unearned premium above $50.14Virginia Code Commission. Virginia Code Title 38.2 Chapter 16 – Guaranty Association You must be a Virginia resident when the loss occurs, or the insured property must be permanently located in the state.
The Association’s obligation reaches claims that existed before insolvency and arose before the earliest of 91 days after the insolvency determination, the policy’s expiration date, or the date you replaced or canceled the policy.14Virginia Code Commission. Virginia Code Title 38.2 Chapter 16 – Guaranty Association Find replacement coverage quickly; this is a safety net, not a substitute insurer.
How to File a Complaint Against Your Insurer
If you believe your insurer violated Virginia law in handling a claim, setting a rate, or terminating your policy, file with the State Corporation Commission’s Bureau of Insurance. The Bureau investigates complaints against regulated insurers and agents.15Virginia SCC. File a Complaint
Know the limits. Bureau staff cannot act as your attorney and cannot adjudicate disputes. Where the issue is a specific violation of Virginia insurance law, the Bureau can investigate and take regulatory action. Where it turns on contested facts or internal company policy rather than a legal violation, a private attorney or court may be the only route.15Virginia SCC. File a Complaint Even so, a complaint on file will sometimes get an insurer to take a second look at a denied claim.