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| Cancellation & Non-Renewal |  Cancellation and non-renewal are very different things though they may seem like they have the same affect on you. Cancellation is when the insurance company stops a policy before the end of its term. Non-renewal is when the company determines it will not allow you to continue your policy to a new term. This affects on your future.
It is not allowed for insurance companies to cancel a policy that has been in force for more than 60 days except:
• If you fail to pay the premium.
• You have committed fraud or made serious distortions on your application.
• Your driver's license has been revoked or suspended.
Non-renewal is different from cancellation. Either you or your insurance company can determine not to renew the policy when it expires. Most states require that before insurance company drops your policy, it has to give you a particular number of days notice and explain the reason for non-renewal. Call the insurance company's consumer affairs division, if you think the reason is unfair or need a further explanation. If you don't get a sufficient explanation, call your state insurance department. Non-renewal reasons are restricted by regulations.
You shouldn't necessarily think the non-renewal is because of something you did. The insurance company may determine to drop that particular line of insurance or to write fewer policies where you live. On the other hand, if you did do something that enlarged the insurance company's risk considerably, like driving drunk, the premium may rise and you may not have your policy renewed.
If your insurance company did not renew your policy, it does not mean that you will be charged a higher premium at another insurance company. If your policy was cancelled, then you may be required to pay higher premiums elsewhere, or may even have trouble finding other coverage.
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Cancellation & Non-Renewal