Car Insurance Non Renewal: What You Should Know
What You Should Know About Car Insurance Non Renewal
If your auto insurance company is unhappy with the relationship, it can break up with you, either by nonrenewal or cancellation of your policy. Cancellation is a more serious problem, but both can result in having to find another carrier. So, what’s the difference between car insurance non renewal and cancellation?
Car Insurance Non Renewal
Nonrenewal is when you or your insurance company decide not to renew when the initial coverage period expires.
If your insurance provider decides to not renew your coverage, you’ll receive a letter that notifies you of nonrenewal, tells you why that decision was made and provides a window of time for you to work with in terms of securing coverage from a different company before your current coverage ends.
Why Was I Hit with Car Insurance Non Renewal?
An insurance company can decide not to renew a policy for a number of reasons. Maybe the company has decided to provide fewer policies in your area or has some other reason that has less to do with you than internal decisions.
More common reasons, however, focus on you and your situation. Your insurance company often bases the decision upon seeing you as more of a risk to insure.
Some of the more common reasons for auto insurance nonrenewal include:
- Too many insurance claims. If you’ve submitted too many claims related to car accidents, particularly ones for which you are at-fault.
- Multiple tickets. Even too many minor moving violations, like driving above the speed limit, can result in nonrenewal.
- A DUI (driving under the influence) or DWI (driving while intoxicated) is now on your record.Getting dinged for driving while intoxicated is serious and comes with expensive fines to pay.
- The company no longer wants to cover another driver on your policy. You might not have to lose your coverage due to a different driver; talk with your agent about getting a driver exclusion on your policy. The other person named on your current policy will have to find new coverage individually.
- Moving out of the area. If you move out of the provider’s coverage area, you will probably receive a nonrenewal notice.
Note that there is no penalty for nonrenewal, unless you are being dropped because of a serious offense. If you received a DUI or DWI higher premiums are likely a given no matter which insurance company you buy insurance with.
Car Insurance Cancellation
Having your insurance policy canceled is more serious than nonrenewal. Unlike cancellation, nonrenewal doesn’t automatically result in the good possibility that your coverage costs will probably be higher with your next carrier.
Reasons for Being Canceled
Generally, cancellation occurs before your policy term ends, but after it has been in effect for more than 60 days. Typical reasons for having your car insurance canceled are:
- Missed premium payments
- You submitted a fraudulent claim
- You’ve had your license suspended or revoked
- The insured car has not been registered
- You lied to or misled the company on your application
Cancellation usually results in being charged more by the company you go to next. If you receive notice that your insurance will be canceled, it is best to contact the current insurance company as soon as possible and find out if there is anything you can do to fix whatever the problem is. It could be, for instance, that your impending cancellation is due to missed premium payments, you may be able to rectify the issue by paying what you owe plus a late fee.
When You Get a Nonrenewal Notice: What’s Next?
There are actions you might want or need to take if you receive a car insurance nonrenewal letter.
- Call your broker or insurance company. If you receive a notice of nonrenewal it will note the reason why. Your insurance company can provide more in-depth information and you can argue your case if you think it is not fair. Worst case scenario, if you don’t get a satisfactory response on a nonrenewal you believe you don’t deserve, get in touch with your state’s insurance department to discuss your situation.
- Do not let your coverage lapse. Secure a new auto insurance policy if necessary. If you are set to lose your coverage through nonrenewal, get a new policy lined up to take effect before your current coverage is set to end.
Do you need nonstandard insurance?
If you incur recent traffic accidents or violations or need to add a driver to your policy, you will likely have to pay higher premiums to your next insurance company. If you’ve been in several accidents or have repeated issues on your driving record, consider getting a nonstandard insurance policy.
Nonstandard insurance is for drivers considered to be the highest risk and most likely to file claims. Because of the risk that insurance companies take on with nonstandard policies, premiums are especially high.
Preferred drivers pay lower premiums because companies consider them very low risk. Standard drivers are considered average risk and pay a regular premium. Substandard drivers are the highest risk to the insurer and will be offered nonstandard policies with the highest premiums or denied coverage altogether.
Shopping for New Auto Insurance Coverage
If you lose your auto insurance due to nonrenewal or cancellation, avoid a lapse in coverage. You will need to get new coverage that starts before your current insurance is scheduled to end. Start shopping for a new policy as soon as possible. The best approach is to get quotes from several insurance companies, using the same data and details for each.
Getting quotes using an online interactive tool simplifies and speeds up the process. Explore EINSURANCE for auto insurance, learn more and get quotes to compare so you can get the right policy for your needs at the best price possible.