You may be wondering what a car insurance non-renewal notice means and what to do if you received it in the mail. As a result, your auto insurance coverage will not be renewed automatically when it expires. You will instead be left without insurance.
Learn the reasons for the non-renewal, what your rights are, what the difference between a cancellation and a non-renewal is, and what your next steps should be.
Nonrenewal notice: what is it?
There are a variety of types of auto insurance policies available to you, including three-month, six-month, and yearly policies, and like any subscription, yours must be renewed when it is up for renewal. It is however possible for you, or for your insurance provider, to decide not to continue your policy, resulting in your policy expiring on its expiration date.
You should know
It may be the case that certain states have different rules when it comes to policies that renew after six months as compared to policies that renew after a year.
As an example, an insurer may refuse to renew parts of your policy if you have had multiple claims, even if they were not your fault. For example, a North Carolina insurer might refuse to renew comprehensive and collision coverage if you have a history of multiple claims. In some states, insurers are permitted to renew your policy with another company within the same insurance group after sending you a non-renewal notice.
Nonrenewal Notice Reasons
There are certain states that allow insurers to deny the renewal of your policy for a variety of reasons, some of which are limited to a few, while others allow insurers to deny your renewal for almost any reason. Depending on how long you have held the policy, some states have a different set of requirements. For example, if you have been insured for five years by the same insurance company in Illinois, you may be denied renewal of your policy within 30 days of expiration for one of 27 reasons. In contrast, if you haven’t been with the company for more than five years, they can cancel your employment at any time. Your auto insurance policy might not be renewed by your insurance company for a few reasons. Here are some of those reasons.
Traffic accidents, thefts, and convictions
Drivers with a history of traffic accidents, speeding violations, or motor vehicle convictions may not be eligible for renewal of the policy. It is possible to be charged with driving under the influence of alcohol or drugs, leaving an accident scene, or homicide or assault. Having accumulated points on your license or reporting several stolen cars may also result in nonrenewal.
Suspended or revoked
An insurer may not be able to renew your policy if your car registration or license has been suspended or revoked.
Issues related to autos
When a vehicle is defective, fails a required inspection, or is being used for purposes such as carpooling or transporting flammable material, an insurer cannot renew the policy.
Matters of law
A forfeited bail or conviction of a felony, criminal negligence resulting in a death, auto theft, or other charges can also be grounds for denial of renewal of your auto policy.
The issues that are related to insurance
If the insurer no longer offers insurance in your state or does not cover certain types of insurance, it may not renew your policy. You may not be able to renew your policy if you move from one state to another. If you do not provide the insurer with all the information it has requested, the insurer may not be able to renew your policy. Generally, if a policy does not renew for a number of reasons, such as geographic underwriting standards and you have a bad driving record or a bad payment history, the policy may not be renewed.
Medical issues you face
There may be situations when insurance companies would not renew a policy for you if one of the drivers in your household, such as a driver that suffers from epilepsy, suffers from a physical condition that could affect their ability to drive safely, and does not have a medical certificate certifying that they are fit to drive safely.
Is misrepresentation or fraud
Getting the original policy or your driver’s license may not be renewed if your insurer finds that you deliberately lied or misrepresented information. Your policy may also not renew if you filed a false or fraudulent claim or helped another person do so.
There are several unknowns
An insurer may not renew a policy in some states for any reason except those based solely on your credit score or factors like your age, religion, gender, race, or marital status.
Important
There are many times when reasons for non-renewal of an auto insurance policy apply to any member of the household or the regular driver of the vehicle, not just the primary insured (i.e. the person who is listed first on the policy).
Notification of nonrenewal laws vary by state.
As a matter of fact, most states require insurers to notify you of the nonrenewal in writing and to include specific facts or reasons for the nonrenewal, such as the specific incident that led to the nonrenewal. Some insurance companies must also inform their regulatory bodies, such as the insurance commissioner, of their nonrenewal.
The notice of non-renewal varies in the amount of time that you must wait to receive it. If your insurer refuses to renew your policy in Ohio, then they must give you 30 days’ notice, 45 days in most cases in Massachusetts, 60 days in Nebraska, and 45 days to 90 days in New York. As a result of this advance notice, you have time to get a new insurance policy in place as a result of this advance notice.
Important
Your insurer may not be able to renew your coverage if you do not pay your premium. In Nebraska, for example, an insurer must give you a 10-day notice before not renewing your policy if your premium has not been paid. Pennsylvania does not require a grace period.
Is it possible to dispute a notice of nonrenewal?
Contact the insurance company directly if you believe that the reasons for non-renewal are incorrect. Whenever the insurance company’s statements are not true or if the company does not follow state requirements, it is your responsibility to provide information or documentation in order to correct the issue.
Depending on where you live, you may be able to request an insurance hearing by engaging your state insurance agency if your insurance company is non-committal or still not renewing your policy. Other states allow you to dispute a nonrenewal only if the insurance company failed to follow state guidelines. Look up your state’s expectations and eligibility for contesting a nonrenewal before contesting.
Important
In the past, states like California have temporarily prohibited insurers from renewing policies in certain zip codes as a result of wildfires and extreme weather conditions.
The state insurance department can assist policyholders if insurers do not renew.
If Your Coverage Is Denied, What Should You Do?
You can shop for a new insurance policy or talk to an independent insurance agent as soon as possible if you can’t renew your current policy with your current insurer. You may need to explore high-risk insurance options if your insurance was not renewed because of a serious driving violation.
Non-renewals and cancellations: what's the difference?
Although the differences depend again on state law, non-renewal of insurance is different from cancellation of insurance. With a few exceptions, a new insurance company is legally prohibited from canceling your auto insurance after 60 to 90 days. Here are some examples:
Sending notifications :
Nonrenewal
30-60 days, but can also be 20 days
Cancellation
There is a possibility that the notice time frame for nonrenewal is shortened, possibly 10-20 days
Causes :
Nonrenewal
Most states allow insurers to refuse to renew your policy without giving a reason, including the ability to cancel your policy without explanation.
Cancellation
In most states, these are strictly limited to cases involving fraud, non-payment, accidents, or a driving under the influence.
Important
You can also terminate your auto insurance coverage by terminating it. When you revoke your insurance policy, the insurance company cancels the policy through the start date (rescinding your coverage for that period) before returning your premiums. If you provide false information when applying for insurance, you may be terminated.
Here are some common questions
In the case of non-renewal notification not being received in time, what are the damages?
Depending on the state in which you live, the consequences of not providing timely notice may differ. For example, if an insurer does not provide a 60-day notice in Wisconsin, it must continue your coverage for the remainder of the policy period or one year, whichever is shorter.
Is it possible to renew your car insurance in advance?
It is generally the case that you cannot renew your auto insurance policy until you have paid your renewal premium. It is important to remember that you will receive a notice from the insurance company about a month before your renewal with your renewal fee. The renewal of your car insurance will take effect after you pay the premium
Non-renewal notice: how long?
As far as the term of the notice of non-renewal is concerned, this depends on the state law. While it is common to provide 45 to 60 days’ notice before the term expiration date, the timing can vary widely. As an example, Louisiana only requires 20 days’ notice before the renewal date.
If you do not want to renew your auto insurance, how do you do that?
You can choose not to renew your insurance for any reason, or even to change insurance companies, at any time. But you can also choose not to renew your insurance. If you do not wish to renew your policy, you can notify your insurance company by phone or online. Alternatively, you may need to send your insurance company a letter explaining why you do not wish to renew it. While this is the case, it is still very important for you to make sure your new auto insurance policy is in effect before you cancel your existing one, or else you may end up facing fines, fees, and financial responsibility in the event of any accidents that may occur.