Cancellation vs. Non-Renewal Notices

FREE Car Insurance Comparison

 Secured with SHA-256 Encryption

Compare quotes from the top car insurance companies and save!

Here's what you need to know...
  • Most often policies are canceled due to non-payment of policy premiums, driver’s license is suspended/revoked  or due to fraudulent activity
  • Usually, the car insurance company has sent a warning to its policyholder and explained that, unless certain qualifications are met, the insurance policy will not be renewed at the end of the policy term
  • You can protect yourself against a non-renewal notice by complying with the agency’s request within the stated time.

In the insurance industry, there is a major difference between a cancellation notice and a non-renewal notice. A cancellation notice occurs when your insurance company is canceling your policy immediately.

On the other hand, a non-renewal notice indicates that the policy will not be renewed once the policy term ends.

Now that you know the difference between a car insurance cancellation notice and a non-renewal notice, you should familiarize yourself with how and why cancellation notices and non-renewal notices occur.

You should also learn the best way to protect yourself and deal with these notices should it happen to you.

Compare online car insurance rates by typing your zip code into the free comparison tool above now!

Why does a car insurance company issue a cancellation notice?

AdobeStock_49125004-1600x1600

A car insurance company will issue a cancellation notice when it deems it necessary.

Most often policies are canceled due to the following situations:

  • non-payment of policy premiums
  • when a driver’s license is suspended or revoked
  • fraudulent activity, including lying on your insurance application or filing fraudulent claims

Unfortunately, if you are found to be the one at fault for an excessive amount of accidents or for driving while intoxicated, insurance companies will often drop you for these infractions as well.

There are also certain states that enforce very strict rules and cancel policies once they receive information that the insured was once a drug addict or convict.

If you suffer from heart or neurological disorders, you are also at risk for being canceled by your insurance carrier.

When can a car insurance company issue a cancellation notice?

A car insurance company can issue a cancellation notice at any time, but cancellation notices usually occur within the first 60 days of having the policy.

During the first 60 days, the insurance company is reviewing your driving records, credit history, application, and anything else it deems necessary to determine whether or not you are a safety risk.

FREE Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption

How can I protect myself against being canceled by my insurance agency?

There are ways to protect yourself from being canceled by your insurance agency. First, and foremost, you should always be honest when applying for insurance coverage, and be sure and pay your policy premiums.

If for some reason you are unable to make a payment, contact your agent to make payment arrangements as soon as possible.

Next, try to be a careful driver so that you do not risk having your license taken away. However, should you fall into these unpleasant circumstances, get an attorney so that you can protect yourself from losing your insurance.

Individuals who suffer from heart or neurological disorders should obtain a doctor’s note explaining that their disorder does not impact their driving.

A doctor’s note on file can prevent an unnecessary cancellation.

Finally, if you ever feel like you have lost your insurance due to a reason that seems unfair, contact your state insurance department and file a claim with them. It is their job and responsibility to protect the insured.

Why does a car insurance company issue a non-renewal notice?

difference between cancellation notice and non-renewal notice

A car insurance company will issue a non-renewal only after giving notice that such an event is pending.

Usually, the car insurance company has sent a warning to its policyholder and explained that, unless certain qualifications are met, the insurance policy will not be renewed at the end of the policy term. Most policy terms are for six months or a year.

The reasons for a non-renewal notice are often very similar to that of a cancellation notice. However, there are situations where the insurance company is no longer offering the type of insurance you might have or may no longer be licensed in your state.

When either of these situations occurs, the company is forced to send a non-renewal notice.

When does a car insurance company issue a non-renewal notice?

Non-renewal notices are sent 30 to 60 days before going into effect.

Look at the non-renewal notice as a warning to comply with the agency’s request.

If you fail to comply with its request, you should start looking for insurance immediately, as your next notice will be a cancellation notice.

You can protect yourself against a non-renewal notice by complying with the agency’s request within the stated time.

However, if the non-renewal is due to the insurance agency changing its coverage or ability to insure, then take this opportunity to find cheaper policies elsewhere.

Take the time now to compare online car insurance quotes by entering your zip code into the free rate tool below now!

FREE Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption

[0-9]
[0-9]