Car Insurance Non-Renewal Vs. Cancellation

China iTech Ghana
Saturday, October 2, 2021 | views Last Updated 2021-10-02T14:50:52Z

A canceled car insurance policy is different from a car insurance policy that is not renewed. A nonrenewal happens when your insurance company discontinues your policy at the end of the coverage period. 

Cancellation is typically when your insurance company cancels coverage during the term of the policy.

Reasons for a Car Insurance Cancellation

There are several possible reasons for an auto insurance policy to be canceled. The most common reasons are late payments and failure to disclose information on your car insurance application.

Other possible reasons for a canceled auto insurance policy are:

Your driving record is bad, such as too many at-fault accidents or moving violations over a set period of time, such as 36 months.

  • Your driver’s license or registration gets suspended.
  • You made a fraudulent claim on your car insurance, such as giving false information about an auto insurance claim.
  • You were convicted of a felony such as driving under the influence.
  • You drive for a rideshare company such as Uber or Lyft and failed to tell your insurance company.

You have a medical condition that makes you an unsafe driver. For example, in Illinois, a car insurance company can cancel your car insurance if you are diagnosed with epilepsy and your doctor doesn’t offer proof that your epilepsy won’t impair your driving.

Reasons for Non-Renewal of Car Insurance

Non-renewal occurs when the insurance company decides not to continue the coverage when the policy expires. Here are common reasons for non-renewal:

Your insurance company decides to stop doing business in your state, or to sell fewer policies in your area.

  • You made late car insurance payments.
  • You put false or fraudulent information on your insurance application.
  • You’ve had multiple moving violations or caused car accidents.
  • Notice of Non-Renewal or Canceled Car Insurance

If your policy isn’t renewed or is canceled, your auto insurance company will send advance notice with an explanation. The time frame depends on state laws and the circumstances, but you typically get a notice 30 to 60 days before the cancellation date. For nonrenewal, it’s generally 10 to 75 days.

How to Get Car Insurance After a Non-renewal or Cancellation

After you receive notification that your policy is going to be canceled or discontinued, you’ll want to move quickly to get new coverage in place before the termination date. What’s the rush? Your insurance company is required to contact your state’s motor vehicle department once a car insurance policy is canceled.

If you are unable to find new insurance coverage, your state might require you to turn in your car’s tags and surrender your driving privileges.

You also want to avoid a lapse in coverage, or an uninsured time period in between policies. If you fail to get a new policy quickly and wind up uninsured, you can’t legally drive. If you do drive uninsured and cause an accident, you are responsible for paying the medical and repair bills.

If you’re caught driving uninsured, you also face penalties and fines. Additionally, you generally pay more for car insurance after a lapse in coverage because carriers consider coverage gaps to be high-risk behavior.

Here’s how to get coverage after a non-renewal or cancellation notice and still save money:

Determine sufficient coverage. It’s smart to buy enough liability insurance to match the value of your savings, home and other assets. Avoid buying just the minimum liability coverage needed to drive legally in your state, as this may not be enough to cover even minor accidents.

Research car insurance companies. You don’t want to choose a company based only on price. Customer service and claims handling are also important. Find the best car insurance companies for your short list by researching rankings and reviews.

Comparison shop and ask for discounts. Compare car insurance quotes from multiple companies for the same coverage amounts. That’s the best way to garner savings because otherwise you won’t know what companies are charging.

Even if you have multiple violations, a DUI or several accidents, you’ll find some companies charge much less than others. Be sure to get all the driver discounts applied that you’re eligible for.

Buy your policy and set the effective date for the day your old policy expires. Be sure that your new policy will be in place when your old policy ends. That way you avoid a lapse in coverage and won’t be driving uninsured.

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  • Car Insurance Non-Renewal Vs. Cancellation

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