When your insurance company decides to non-renew your business insurance policy, it’s understandable to wonder what went wrong. You may ask yourself, what does it mean? Why did it happen? What can I do? Luckily, we compiled a list of answers to the most common questions that arise from receiving a non-renewal notice from your insurance provider here.
How Does A Non-Renewal Work And When Can It Happen To Me?
It’s important to understand that a cancellation notice of your business insurance policy is significantly different from a non-renewal notice. The most common reasons why an insurance company would cancel your policy are if you failed to pay the premium or if you have misrepresented yourself on the insurance application. In most states, insurance companies must give you a written notice of cancellation at least 30 days before canceling your policy.
Non-renewal is a different matter. Close to the end of your insurance term, your insurance company will decide whether they will offer to renew your policy at the same rate, adjust your rates, or not renew your policy. If your insurance company has chosen to non-renew your policy, it must send you a written notification and explain the reason for not continuing your policy a set number of days before your current policy ends. This is to provide you with enough time to find a new coverage for your business.
Why Did My Insurance Company Drop My Business Insurance?
Just as your insurance company may cancel a policy, they might also choose not to renew one. Below are several reasons why your business insurance policy was not renewed:
1. Excessive Claims
All insurance companies know that paying claims is part of their business. However, when a business has filed frequent claims, it may no longer be in alignment with its insurance company’s appetite. Even if they may be in good standing and pay their premiums on time or if the damage was unintentional, insurance companies can’t afford to pay out too much in claims.
2. Change of Appetite
Insurance companies often like to write specific types of business or “appetite.” Insurance companies favor these lines of coverage or particular industries or operations because they may have a lower risk of filing an insurance claim. However, sometimes an insurance company may not fully understand everything an industry does and once they do, they reconsider their guidelines or appetite.
3. No Longer Wants To Sell Insurance In a State
A non-renewal might also occur purely because a company stops offering a specific line of coverage or geographical region. If an area is prone to natural disasters like wildfire or hurricanes, it could be too costly for an insurance company to do business there.
What Should I Do After Getting a Non-Renewal Notice?
Don’t fret – A non-renewal doesn’t necessarily mean you did anything wrong, nor does it mean you won’t be able to find insurance for your business. Here are the steps to help you navigate these uncertain times.
1. Find Out Why The Non-Renewal Happened
You should immediately contact your insurance company to investigate why you were dropped and if there is anything you can do to reverse the non-renewal. If there is nothing you can do, find out if your insurance company or broker has a plan in place to find replacement coverage for you.
2. Get Your Loss Runs
Do yourself a favor and get a copy of your loss runs even if you have never filed a claim for your business. Loss runs are documents that give a snapshot of your company’s claim history. Insurance companies need to know if you have any prior claims when you obtain new coverage after a non-renewal has been issued.
3. Start Shopping For Insurance
Switching insurance companies will probably be a frustrating process as it can take up much of your time to find a suitable carrier. Luckily, our team of licensed business insurance specialists can help you navigate through this fickleness and assist you with finding the best coverage possible for your company.
Let us take the stress out of finding affordable business insurance so you can focus on your business. Speak with one of our Commercial Insurance Specialists today at (855) 919-4247 for a quick and easy free quote.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.