What’s the Difference Between Auto Policy Cancellation and Non-Renewal?

September 27, 2023||inBusiness Insurance, Personal Insurance|auto insurance, business insurance, commercial auto insurance, personal insurance

There’s a difference between an insurance company canceling a policy and choosing not to renew it.

Learn why your Auto Insurance or Commercial Auto policy might not be renewed.

Auto Insurance Cancellation

Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:

What's the Difference Between Auto Policy Cancellation and Non-Renewal?
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  • You fail to pay the premium.
  • You have committed fraud or made serious misrepresentations on your application.
  • Your driver’s license has been revoked or suspended.

Auto Insurance Non-Renewal

You or your insurance company can decide not to renew the policy when it expires.

What you need to know:

  • Your insurance company must give you a certain number of days’ notice and explain the reason for not renewing before it drops your policy (the exact timeframes and rules will depend on the state in which you live).
  • An insurance company may choose not to renew a policy for several reasons, and it may have nothing to do with you. For example, your insurer may have decided to drop that particular type of insurance or to write fewer policies where you live.
  • Nonrenewal can also be due to your record or your actions. Driving drunk or doing something else that considerably raises the insurance company’s risk would be cause for non-renewal.

Call the insurance company’s consumer affairs division if you’ve been told your policy is not being renewed and you want a further explanation or think the reason is unfair. Contact your state insurance department if you don’t get a satisfactory answer.

Note: Nonrenewal at one insurer doesn’t necessarily mean you’ll be charged a higher premium at another insurance company.

Source: Insurance Information Institute

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