By June 20, 2007 0 Comments Read More →

Car insurance cancellation and non-renewal.

Reader question:

What’s the difference between cancellation and non-renewal? I mean, either way it looks bad and you don’t have car insurance, right?

Misty

That kind of explains it, yeah.

But there’s a lot more to it than that, and in fact there is a big difference between the two. Still, you want to avoid either, because neither look very good on your car insurance record. In some states, being without insurance for any amount of time can bring you trouble, so you want to avoid as much as possible creating gaps in your coverage. Also, both cancellation and non-renewal show you to be an unreliable customer, and car insurance companies will feel less certain about taking you on.

Insurance companies can’t cancel a policy that’s been going for over 60 days unless

  • you don’t pay your premium
  • you committed fraud or misrepresented yourself seriously on your application for car insurance
  • your license is suspended or revoked

Nonrenewal is a whole other thing. You can decide not to renew your policy when it expires just like your car insurance company can, so the ball’s on both sides of the court here. Though the requirements change depending on which state you’re in, your insurance provider has to give you a number of days notice as well as telling you why it won’t renew your policy before it actually drops you. That gives you time to look somewhere else. If you think you’ve been dropped for unfair reasons, you can contact the company’s consumer affairs department, and if that fails, your state insurance department.

Policies can be not renewed for a number of reasons. Maybe your insurance provider just needs fewer customers in your area, or is discontinuing the type of insurance you have, or maybe you messed up and got caught driving drunk. If your company doesn’t renew your policy, that doesn’t necessarily mean you’ll get charged higher rates elsewhere, but you might.

Cheers,

Fashun Guadarrama.

Posted in: Auto Insurance

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