It would be upsetting and even may be embarrassing to know you are refused car insurance renewal. Are there restrictions detailing under which conditions insurers can refuse to renew a policy or is it totally up to them? Can a vehicle insurance company refuse to renew a policy due to claims? These questions and other reasons for auto insurance non-renewal are discussed below.
Refused Car Insurance Renewal due to Large or too Many Claims.
Renewals are there to allow companies and policyholders to assess the latest position with the policy. Lately, insurers are not shy to intervene when they are not happy with the risks by refusing to renew auto insurance policies. One of the reasons why most policies are renewed every 6 months is because of insurers’ desire to clean up bad risk. Large or too many claims worry insurers enough to choose not to renew policies.
Some companies may state the reason for non-renewal and in some cases it may be obvious enough. However, policyholders have the right to ask why their policies aren’t renewed and they usually get straight answers from their insurers when they ask.
Furthermore, insurers can tell policyholders to go away with a large increase in car insurance rates after accidents. You can find out how much does insurance go up after accident by following the link. Most policyholders are likely to find alternative insurers in this case anyway. It is probably only fair that auto insurance companies charge more for drivers who are proven to be high risk.
Certainly, there are limits as to what would constitute as large claim or how many claims are too many. These restrictions on car insurance non-renewals vary according to each state insurance laws. It is unlikely that state authorities will be too restrictive in the way automobile insurance carriers choose to refuse or accept risk. Generally authorities recognize the free choices available to insurers and policyholders. You have plenty other companies in the market to seek alternative quotes from that one insurer’s refusal to renew your policy shouldn’t cause a big issue. Therefore, authorities don’t consider it is necessary to interfere the way auto insurers set their policies. The simple message is that if you don’t like it go and find another policy.
Auto Insurance Non-renewal after too Many Traffic Tickets
Several traffic tickets or one large ticket like DUI is enough for some car insurance companies to refuse renewal. The logic is clear that drivers who keep breaking traffic rules by speeding, making wrong turns or driving under the influence of alcohol are likely to cause an accident sooner or later. Repeated traffic offences are good indication that there is more to come. Vehicle insurers are actively managing their risks and not willing to sit around and wait until a large claim is lodged. A few insurers choose to weed out such drivers by denying to renew auto insurance policies.
Therefore, you should be managing your risk levels by challenging some of the traffic tickets where possible. And also, you can keep the number of claims in check by withholding from making small claims. Actually, the best solution is to learn how to be a defensive driver to avoid tickets and accidents.
Auto Insurance Non-Renewal due to an Out of State Move
You can only keep your old policy from your previous state up to certain days when you move to another state. Your carrier will not renew your policy knowing that you are now subject to different insurance regulations. Even you want to stay with the same company you may want to apply for a policy again since the rates would probably be a lot different. As long as you manage this non-renewal due to moving by buying a suitable replacement policy you shouldn’t have any negative effects.
Does Non-renewal Affect Car Insurance Rates?
However, first two reasons for non-renewal will probably be noted by other carriers and may affect your rates directly or indirectly. You cannot really hide the fact that you have made recent claims or your driving skills has been declining. However, you may be able to reduce the effects a little by being proactive. Taking an advance driving course may work in both cases. As you will be improving your driving and therefore reducing the chance of further accidents or traffic violations.
There are cases where insurers declined to renew automobile insurance policies purely for operational reasons. In one case, an insurer has written to the policyholders informing them that their policies won’t be renewed if they don’t buy at least home insurance from the insurer. The reason was that insuring cars alone wasn’t profitable enough for the company and therefore they wanted the less riskier home insurance as well for it to be worthwhile.
Interestingly, state department of insurance in the above case chose not to intervene with this decision citing that there are many other vehicle insurance providers in the area and one company’s decision not to carry on insuring vehicles won’t detriment policyholders’ chances of finding affordable replacement. So, you should move on and find replacement coverage somewhere else should your insurer decides not to offer coverage to you any more for whatever reason. There are plenty other insurers in the market to worry about.