In the latest entry to their extensive library of answers to
frequently asked auto insurance questions, the writers at OnlineAutoInsurance.com explain the distinction between non-renewals and cancellations and give some of the typical catalysts for each.
The major difference between a non-renewal and a cancellation is pretty clear-cut: cancellations cease protection in the middle of the policy period, while a non-renewal ceases coverage at the end of the policy period and does not allow the policyholder to renew coverage.
According to OAI, common reasons for cancellation include failing to pay premiums, having a license suspended or revoked, being involved in a fraudulent claim and violating of a policy’s terms or conditions.
The accepted reasons for non-renewals are generally broader. Most states simply say that insurers can choose to non-renew a policy for any reason aside from any that may be considered discriminatory (such as a driver’s gender, occupation, marital status, etc.).
But there are numerous laws that restrict the circumstances under which a policy can be canceled or non-renewed, depending on the state. In Arizona, for instance, an insurance company can refuse to renew a policy if the holder has filed excessive property damage claims. The record must consist of three property damage claims that each reaches a certain minimum dollar amount within a 3-year period in order to do this legally.
If a driver feels that he or she has wrongly had a policy cancelled or non-renewed, the issue should first be taken up with the insurer. In cases where the previously insured driver feels that they have been wronged in this way even after this step, the next step would be to take up the issue with the state insurance regulator, who will act as an objective mediator in the dispute.
To access this and the rest of OAI’s car insurance FAQs, readers can go to
http://www.onlineautoinsurance.com/learn/ where they will find informative resource pages and a quote-comparison generator that consumers can use for free to track down the best prices for a policy.
