Getting Car Insurance after Non-renewal

Companies appear to be hungry for more business all the time. A day doesn’t go by without being exposed to their advertisements. It may be hard to imagine that your auto insurance carrier drops you but they do when they consider the risks to be too high. Motorists aren’t obliged to stay put either in this very competitive marketplace.

Most 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 they can either increase the 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 and shareholders to report to.

What Is Non Renewal of Car Insurance?  

It is a refusal to extend the coverage once it expires. Once they decide to let someone go they have two options. They either end it immediately or wait until it expires. In practice, they are expected to offer a quote for the next term to keep it running. If they are not offering new terms then they are ending their assumed obligation to quote again. In contractual terms, it is not a cancellation but termination of an apparently open-ended contract at the agreed intervals.

Policies are generally open-ended contracts with break clauses. Both parties can break away at the end of the term without any penalties. Otherwise, it would continue as usual when the company offers good terms and the customer pays the premium. That is why automobile insurance non-renewal isn’t a cancellation in contractual terms.  

Normally, A carrier can decide to drop coverage if; a) you file multiple claims or get a few tickets in a short period, b) credit score goes down sharply or c) multiple reasons raise your risk profile in the eyes of the underwriter. 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 the former goes on driving records and seen by others you will want to use. On the other hand, the latter doesn’t get recorded and therefore its effects aren’t as dramatic. Hence you should be able to find a suitable replacement quickly after being dropped.

Getting Auto Insurance following Non Renewal Notice

It is best not to take it to heart and get on with it efficiently. Both you and the insurer can choose not to keep a policy. Then, the main concern is to make sure you don’t have a lapse. Arranging a replacement in time will prevent a lapse in coverage. Usually, around ten days to two weeks notice is enough in most states and in fact it is enough to arrange replacement coverage.

The carrier has to explain why they decided to send the policyholder packing. 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 the rates from alternative sources.

Non renewal of vehicle insurance doesn’t always increase premiums. If it has nothing to do with driving or claim history you can get affordable quotes somewhere else. 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 records and that will increase the premium. How much it will go up will depend on what caused it. If it is too many claims or a recent DUI you can face steep premium hike. You may want to look into excluding a driver if the drop is due to a listed person.

Whatever the reason, it is usually difficult to overturn a decision. If you want to switch 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 coverage you can find. So, don’t waste time and start getting quotes online and/or through agents. Challenge the decision if you wish but get prepared in the same time. You can check your alternatives here too. Why not give our underwriters a chance to win you over.