Getting Car Insurance after Non-renewal

Insurers appear to be hungry for more business all the time. A day doesn’t go by without being exposed to a vehicle insurance advertisement. It may be hard to imagine that your auto insurance company drops you but they do drop drivers they consider high risk. You can also choose not to renew your policy.

Most automobile insurance policies in the US are for 6 month only because carriers want to leave their options open. If they find that you are becoming a liability for the company they can either increase your premium or kick you out altogether. They are in the business of risk management and pricing. And they are after all businesses with profit targets.

What Is Non Renewal of Car Insurance?  

Once a car insurer decides to let a policyholder loose they have two options. They either cancel the policy immediately or wait until it expires. A car insurance non renewal is a refusal to insure a policyholder effective from renewal date. In practice, carriers are expected to offer a quote for the next term to keep the policy running. If they are not offering new terms then they are terminating their assumed obligation to renew the policy. In contractual terms, it is not a cancellation but termination of an apparently open-ended contract at the agreed intervals.

Insurance policies are generally open-ended contracts with break clauses. Both parties can break away at renewals without any penalties. Otherwise, it would continue as usual when the insurer quotes good terms and the policyholder pays the premium. That is why auto insurance non-renewal isn’t a cancellation in contractual terms.  

Normally, An insurer can decide to drop your car insurance policy coverage if you a) file multiple claims or get a few tickets in a short period, b) your credit score drops sharply or c) multiple reasons increase your risk profile in the eyes of the insurer. Also, they may be giving you a notice because they decide not to sell certain types of policies or in certain locations.

One very important difference cancellation vs non-renewal is that cancellation goes on your driving record and seen by alternative insurers you will want to use. On the other hand, non renewal doesn’t get recorded and therefore its effects isn’t as dramatic. Hence you should be able to get insured again suitably and quickly after being dropped by your insurer.

Getting Auto Insurance following Non Renewal Notice

Both you and your insurer can choose not to keep a policy. Then, the main concern is to make sure you don’t have lapse in vehicle insurance coverage. Arranging a replacement policy in time will prevent a lapse in coverage. Usually, around ten days to two weeks non-renewal notice is enough in most states and in fact it is enough to arrange a replacement car insurance coverage.

The carrier has to explain why they decided to drop the policyholder. You can always call them and ask to explain further or dispute the decision but they probably have good enough reason. Their reasons are very important and may affect your premium from an alternative provider.

Non renewal of auto insurance doesn’t always increase your premium. If it has nothing to do with your driving or claim history you can get affordable quotes from other companies. You may even find much cheaper rates if you shop around.

If it was due to recent claims or serious driving offences they will show up on your driving record and that will increase the premiums quoted. How much premium you will need to pay now will depend on what caused the drop. If it is too many claims or a recent DUI you can face steep premium increase. You may want to look into excluding a driver if the drop is due to another driver on the policy.

Whatever the reason, it is usually difficult to overturn a vehicle insurance non-renewal decision. If it was your decision not to renew with the company due to bad claim experience or service you probably should carry out your decision too. Now, you need to shop around for the most economical policy you can find. So, don’t waste time and start getting your quotes online and/or through agents as soon as you receive your notice. Challenge the decision if you wish but get prepared in the same time. You can get several quotes right here too.

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