Generally, it is assumed that motorists will get a new quote at the end of each policy term. However, companies may not be happy with the way it is going due to increased risks, a large or too many claims, tickets or another issue and want to terminate the contract for good. This post looks at the reasons for auto insurance non-renewal and discuss them below in detail.
It would be disappointing and even may be embarrassing to learn that they don’t want you anymore. People usually take any kind of rejection hard and personal. Are there restrictions detailing under which conditions insurers can refuse to extend a policy or is it totally up to them? Technically, both parties can walk away from it once the contract is over but is it fair?
Refused Car Insurance Renewal due to Large or too Many Claims.
Terms are there to allow companies and policyholders to assess the latest position. Lately, they are not shy to intervene when they are not happy with the risks by refusing to extend the contract. One of the reasons why there are 6-monthly intervals is because of underwriters’ desire to clean up bad risk. Large or too many claims worry them enough to walk away while they can. It is probably a smart move from their point of view.
Some companies may choose to detail their excuse and in some cases it may be obvious enough. However, customers have the right to ask what were the issues and they usually get straight answers. This may help in the process of shopping for a replacement and fixing them in the future.
Furthermore, they can tell policyholders to go away with a large increase in vehicle insurance rates after accidents. Most motorists are likely to find alternative solutions in this case anyway. It is probably only fair that people who are proven to be high risk pay more because it is a pool of resources. Generally, the person who uses something more than others should spend more money for it.
Certainly, there are limits as to what would constitute as large claim or how many are too many. These restrictions on car insurance non-renewals vary according to each state laws. It is unlikely that authorities would want to restrict carriers’ decisions to deny or accept risk. Generally authorities recognize the free choices available to both sides. You have plenty other companies in the market to seek alternative quotes from that one denial of coverage shouldn’t cause a big issue. Therefore, authorities don’t consider it is necessary to interfere the way underwriters deal with certain concerns. The simple message is that if you don’t like it go and find another coverage.
Auto Insurance Non-renewal after too Many Traffic Tickets
Several traffic tickets or one large ticket like DUI is enough for some companies to say we had enough with you. 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. Naturally, underwriters are actively managing risks and not willing to sit around and wait until a large claim land in their lap. A few of them choose to weed out such drivers by denying renewing automobile insurance policies.
Therefore, you should be managing risk levels by challenging some of the citations where possible. And also, you can keep the number of claims in check by withholding from making small ones. Actually, the best solution is to learn how to be a defensive driver to avoid tickets and accidents.
Vehicle Insurance Non-Renewal due to an Out of State Move
You can only keep an old policy from a previous state up to certain days when you move to another one. The carrier will not extend it knowing that you are now subject to different regulations. Even you want to stay with the same company you may want to apply again since the rates would probably be a lot different. Normally you shouldn’t have any negative effects and should be able to purchase a suitable replacement.
Does Refused Renewal Affect Auto Insurance Rates?
First two reasons mentioned-above will probably be noted by other carriers and may affect premiums directly or indirectly. You cannot really hide the fact that you have had recent issues with your driving since you either had an accident or were punished severely for a bad motoring practice. 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 and therefore reducing the chance of further incidents or traffic violations. You may also be able to get a little discount for taking the course in some places.
There are cases where companies declined to continue offering policies purely for operational reasons. In one case, people were informed that they need to buy at least home plan along with auto for it to be worthwhile business. The reason was that having cars alone wasn’t profitable enough for them and therefore they wanted the less risky home line as well for it to be worthwhile.
Interestingly, state department in the above case chose not to intervene with this decision citing that there are many other providers in the area and one’s decision not to continue won’t be detrimental enough when it comes to finding affordable replacement. So, you should move on and find alternative coverage somewhere else should your carrier decide not to extend it any more for whatever reason. There are plenty others in the market to worry about.