Differences Between Non-Renewal And Cancellation Of Car Insurance

Differences Between Non-Renewal And Cancellation Of Car Insurance

When you compare auto insurance quotes, you are probably not thinking about your current insurance company, although you should be including them in your auto insurance comparison. However, you will be asked about your current auto insurance company when you get new insurance quotes in your quest for a cheaper car insurance premium.

You need to know if your current insurance company has ever cancelled you, or not renewed your policy. These things are completely different and can affect your car insurance rates.

When you have had continuous insurance coverage for any length of time, you may be eligible for a discount. However, if you have been cancelled, you may be subject to a higher insurance rate.

Cancellation

Your insurance company cannot cancel you after 60 days as long as you have paid all your premiums on time and have not committed any type of insurance fraud on your application.

As long as you are making timely payments, your insurance company must continue to cover you.

If your insurance company finds that you have misrepresented yourself on your insurance application, they may decide to terminate your coverage. This type of misrepresentation can be construed as soft insurance fraud by providing fraudulent information.

It can be as simple as not giving the correct garage location of your vehicle, to omitting important driving history that would affect your insurance rates. If you have neglected to inform your insurance company that you had a suspended license or have had it revoked and they find out about it at a later date, they do have the right to cancel your policy.

Because insurance companies are regulated by the states, there are certain rules they must follow to cancel a policy. Rules keep companies from arbitrarily canceling drivers that may be a higher risk.

The insurance company can cancel you within the first 60 days if they find something in your background that was undisclosed.

Non-renewal

Non-renewal is when your car insurance company chooses not renew your policy.

This can be for many reasons and some of them have nothing to do with you.

If your car insurance company drops coverage in your state, or if your car insurance company no longer can do business in your area, they may choose not to renew your policy.

A recent example was some homeowners’ insurance companies chose not to renew policies in areas that were devastated by hurricanes. The insurance company simply did not renew those policies.

Non-renewal only happens at the time your insurance policy expires and the insurance company must give you adequate notice as to their intentions regarding non-renewal. They do not need to give you a reason for non-renewal though.

If you did not receive notice that your policy was not being renewed and you paid your premium, the insurance company must wait until the next due date to enforce the non-renewal.

Non-renewals of policies will not hurt you unless there has been information that the insurance company has obtained on your record that you did not disclose.

If you have been subject to a non-renewal, you may be penalized in the future on your car insurance rates. It will depend upon why you were cancelled.

If you find that you have been either cancelled or non-renewed, you can still get insurance. Just make sure that when you are comparing rates and getting your auto insurance comparison quotes that you mention the fact that you have had your insurance dropped or stopped.

If you are not happy with the rates that you are being quoted, then make sure that you compare auto insurance quotes with several other companies and do not forget to include your local agents when you are comparing companies.