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What to Know about Car Insurance Nonrenewal

    3 minute read

    Car insurance nonrenewal is when an insurance company decides not to renew your policy at the end of its term. Although being nonrenewed can feel jarring, it’s important to know that insurance providers don’t decide to nonrenew without a reason. And most importantly, your rates won’t automatically increase just because your policy was nonrenewed.

    Auto Insurance Nonrenewal vs. Cancellation 

    Before discussing reasons why your auto policy may not be renewed, it’s essential to understand the difference between nonrenewal and cancellation.

    Cancellation typically happens at the beginning of the policy if required additional information is not provided or if there is undeclared driving activity for one of the drivers, for example. During the policy term, in most states, the insurer will only cancel for nonpayment of premium.

    On the other hand, a car insurance nonrenewal is when your insurance provider chooses not to renew your policy for any number of reasons. Just like you have the option to change providers at the end of your policy term, your insurer can decide not to renew you as a customer. Although it varies, most states require insurers to notify you of your nonrenewal at least 30 days before your policy expires. This is known as a notice of nonrenewal, which will also provide the insurer’s reason for not renewing your policy.

    Reasons Why Your Auto Insurance Was Not Renewed

    There are various reasons why an insurance company may choose not to renew your auto policy. In some states, the valid reasons are established by law.

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    The most common reason has to do with your risk profile. If you’ve become a greater risk to insure than when you first applied, your provider may not want to renew. Filing multiple claims (especially for at-fault accidents), ongoing traffic tickets, or getting into too many accidents are all ways of being considered a riskier driver.

    Insurance companies may also not renew at the end of your policy for a reason that’s no fault of your own. For example, an insurer may simply make a business decision to stop writing insurance in your city or state. In this situation, you have few options other than searching for a new provider even though you did nothing wrong.

    Other situations that could lead to a nonrenewal include purchasing a higher-end car, moving across state lines, or DUI.

    Fortunately, there is no automatic penalty for having your car insurance be nonrenewed. However, things like additional driving activity may affect your replacement coverage. There are some key steps to take to avoid further issues. 

    What to Do After Receiving a Notice of Nonrenewal

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    Your car insurance notice of nonrenewal will explain why the insurer has decided to discontinue your policy. If you feel the reason is a mistake, contact the provider for information on how you can rectify the issue. If the cause is beyond your control, such as an insurer no longer operating in your area, quickly searching for a new policy is vital to keep your insured driver status.

    Nearly every state legally requires drivers to carry auto liability insurance. After receiving a nonrenewal notice, begin searching for a new policy right away to avoid having a lapse in coverage. Your notice should include the date your current policy expires, so be sure any new policy takes effect before then. Regardless of your situation, you can find the best deal by comparing rates from different providers.

    AIS Can Help You Find Coverage

    Receiving a car insurance nonrenewal notice does not mean finding a new auto policy will be impossible. Depending on what triggered the nonrenewal, you may face little to no issues when searching for a new provider.

    No matter the reason for your search, AIS can help you quickly compare auto quotes from our network of trusted insurance partners. With over 50 years of experience, our specialists can answer any questions you may have and will work to find a policy that best suits your needs. To learn more about the coverages available to you, call us at (888) 772-4247, or start your quote online.

    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 be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.