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Reasons for Car Insurance Non Renewal

To many drivers outside the auto insurance industry, there is little perceived difference between auto policy cancellation and non renewal. Many of us really can't give a suitable explanation for the reasons drivers may be non renewed by their insurance providers, nor the proper steps to follow if and when this ever happens to us. Car Insurance non renewal is not the same as cancellation, but failing to properly respond to this kind of event can have dire consequences on your outlook for obtaining affordable auto coverage in the future. If you understand exactly what a non renewal of coverage means and what to do about it, you can effectively move forward as a car insurance consumer. Better yet, consumers can avoid non renewal by keeping an eye on a few simple factors as drivers and clients of auto insurance companies.

Non Renewal Definition and Overview

If you have recently gotten a notice in the mail indicating you are about to be non renewed in your auto insurance coverage, perhaps you already have some understanding of exactly what it means to be non renewed. The first important thing that must be cleared up is what non renewal isn't. To put it quite simply, auto insurance non renewal is not the same thing as cancellation. It is not as serious as being canceled, although the effects of being non renewed can be just as serious if you do not move quickly.

Auto insurance coverage cancellation is instantaneous, and can happen at any time during the policy period. It means the insurer has found reason to drop you as a customer before the predetermined period of coverage has passed. By contrast, non renewal is generally an event that occurs only as the close of the covered period comes near. Basically, when you are non renewed, your auto insurance provider is simply declining to extend your insurance agreement beyond the original period of time. Normally you will get at least some notice whenever this type of circumstance arises, usually at least ten days to a month.

There are many potential reasons why insurers would choose not to renew your policy. One of them is because of payment issues. If you have shown a pattern of making late payments or having payments declined due to insufficient funds, you might be a candidate for non renewal. However, these sorts of payment patterns are actually much more likely to get you canceled than non renewed. Many auto insurance companies will simply cut their ties with clients who are unable to demonstrate an ability to keep up with their premium payments, and will not wait until the end of the covered period to do so. Thus, payment issues is really not a common factor leading to auto insurance non renewal.

A much more common reason why insurance providers might choose to cut you loose at the end of your coverage period is an overabundance of tickets or atfault accidents within a short period of time. Traffic tickets might be an even more common cause than accidents, because your provider might not find out about these until they run your driving record as part of the renewal preparation process when your policy comes due.

If you have simply demonstrated a tendency to file too many claims, you may also be non renewed, especially if any of those claims appear to be of a dubious nature in the eyes of your provider. Your driving record in general, as well as your specific performance as a driver over the course of your policy period, will play a big role in motivating insurance providers to decide not to renew you when it comes time for the policy period to roll over.

But not all non renewal issues are related to you or to your characteristics as a driver or a customer. There are certainly other reasons for non renewal of insurance coverage which are related to the insurance company providing coverage and not to you. One example can occur when a provider stops offering a particular program under which you are covered. If you are insured under a nonstandard auto insurance plan, for example, and your provider has decided to steer away from these plans and concentrate on standard and preferred policies exclusively, they may be obligated to work with you through the policy termination, but they will let you know they are not interested in keeping you on as a customer beyond that time. Alternately, an insurer may be moving out of state completely, or be in the process of doing so. This is another valid reason providers have for issuing non renewals not based on the attributes of the covered driver.

Get New Coverage Right Away

Surely there are other possible reasons for non renewal of auto insurance coverage. It is important in every case for you to understand the reason why you were non renewed, and to get it in writing. In many cases, the non renewal notice itself will contain an explanation of these reasons; but this is not always the case. You want to have the reason in writing especially in cases where it is a matter of the company moving or no longer offering the coverage you were protected under. You can take this and show it to your next insurer as an explanation for your non renewal to minimize the impact of this appearing on your insurance record.

If you have been non renewed by your vehicle insurance company and do not know why, waste no time in getting into contact with their customer affairs department. If the reason the company gives strikes you as being unfair, do not hesitate to pursue the matter with your home state's department of insurance. Do not just stand by and let the damage be done. And in the same vein, do not let your coverage lapse. Adding a lapse to a non renewal will effectively eliminate any chance you might have for relatively affordable coverage any time in the near future. Make sure you get coverage lined up to begin at the same time your non renewed policy expires.

Avoid Non Renewal of Coverage

And better still, you could do everything possible to avoid non renewal in the first place. Granted, there is nothing you can do about a company leaving the state or no longer offering the type of coverage you need. But there is a lot you can do to avoid the kinds of things that cause companies not to want drivers for clients. Make your payments on time every month. Prepay for coverage if you can afford it. This will save you from having to pay installment fees anyway. Make it a point to drive safely and within the rules of the road. Don't make yourself an easy target for law enforcement officials. Lastly, do not make frivolous or unnecessary claims. The last thing you need is an insurance provider breathing down your neck about fraud or frivolity. Your insurance is there for when you need it, not for you to take advantage of and abuse.

Auto insurance non renewal is generally not as serious as policy cancellation, but it still must be dealt with in a swift and responsible manner to minimize its negative effects on your ability to to afford adequate and reliable insurance coverage going forward.

 

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