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Car Insurance Nonrenewal vs. Cancellation
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Written by
Anna Baluch
Insurance Writer
Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.
Edited by
Jackie Cohen
Editorial Manager
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.Jackie's work has been cited in USA Today, The Balance, and The Washington Times.
Reviewed by
Amber Benka
Licensed Insurance Agent
Amber Benka is a licensed insurance agent specializing in auto, home, commercial, life, and health insurance.
Updated June 15, 2022
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If you receive a car insurance nonrenewal notice, don’t panic. While a nonrenewal may force you to change car insurance companies, it doesn’t necessarily mean your rates will increase. You can look at it as an opportunity to evaluate your car insurance needs and potentially save money on your premiums.
To find better rates, many drivers compare car insurance quotes online. If you’re facing a nonrenewal, you can look for the right car insurance policy for your unique budget and needs.
Quick Facts
A nonrenewal is when your car insurance company decides to discontinue your coverage once your policy period ends.
If your provider decides not to renew your policy, you’ll receive a nonrenewal notice that will explain the reason.
After you receive a nonrenewal notice, it’s important to shop for auto insurance with a different company so you can drive legally and avoid a lapse in coverage.
What is car insurance nonrenewal?
What is car insurance nonrenewal?
Nonrenewal occurs when a car insurance company decides not to renew after a policy expires.
A nonrenewal means that your car insurance provider has decided they will no longer insure you. If you face a nonrenewal, your current policy will end once your policy period expires. The good news is you can purchase insurance elsewhere.
Most states require car insurance companies to notify policyholders about their nonrenewal in writing at least 45 days before the end of their policies. So you should have enough time to shop around, compare options, and purchase the ideal replacement car insurance plan.
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How a Nonrenewal Works
Your car insurance company will send you a nonrenewal notice if it decides to discontinue your policy for any reason. In most cases, these notices are sent 45 before the nonrenewal goes into effect.
You can expect your nonrenewal notice to explain why your car insurance provider doesn’t want to renew your policy. If you’d like more details or believe the nonrenewal was unwarranted, don’t hesitate to reach out to your insurer.
As soon as you find out you’ve been nonrenewed, you should start searching for coverage from a new insurance company. Since auto insurance is required in most states and there’s no grace period after nonrenewal, this should be your top priority.
Take note of the expiration date of your current car insurance. Make sure your new policy takes effect before then. Otherwise, you’ll have a lapse in coverage, which can leave you with serious consequences if you get into an accident during this time. A lapse can also increase your rates.
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Common Reasons for Car Insurance Nonrenewal
There are three main reasons an auto insurance company can decide not to renew your policy. One is an increase in the hazard that they are insuring against. Examples include DUI or DWI, too many speeding tickets, and multiple at-fault accidents in a short period of time. Your insurance provider might send you a nonrenewal notice if any of these apply to you.
The second reason is if you put false information on your insurance application that affected the insurer’s decision to offer coverage. The third is nonpayment of your premium.
In addition, if you move to a new state and your insurance company doesn’t operate there, they won’t be able to renew your policy. Lastly, if they no longer offer a certain type of coverage you need, such as rideshare insurance, a nonrenewal will occur.
See More: Cheap Car Insurance
What to Do If Your Car Insurance Isn’t Renewed
As soon as you find out your car insurance company won’t renew your policy, you’ll need to find a new provider. With countless options at your disposal, you should research multiple auto insurance companies. Compare the rates, coverage options, terms, and discounts of each one.
While you shop around, keep in mind that changes to your driving history or coverage may impact your car insurance rates. If you’ve recently received a few speeding tickets, you can expect to pay more than someone with a clean driving record.
By finding a policy from a different car insurance company, you can avoid a lapse in coverage and won’t be uninsured. If you drive without insurance and cause an accident, you’ll be on the hook for all the medical and repair bills, which can add up to thousands or even tens of thousands of dollars.
Car Insurance Cancellation
A car insurance cancellation is far more serious than a nonrenewal. In fact, you might be penalized if your auto insurance policy gets canceled. Your car insurance company may choose to cancel your plan if you don’t have valid vehicle registration, are driving with a suspended or revoked license, or fail to pay for your coverage.
Other common reasons for an auto insurance cancellation are fraudulent insurance claims and medical conditions that make you an unsafe driver, such as epilepsy. No matter why a car insurance provider is canceling your policy, reach out to them immediately to resolve the issue. You’ll only have a few weeks to do so, so you must act quickly.
Make Sure You’re Covered After a Nonrenewal
Just because you receive a nonrenewal notice doesn’t mean you won’t be able to obtain car insurance. You will, however, need to shop around and find another provider that will offer you coverage.
Even though a nonrenewal isn’t as serious as a cancellation and doesn’t always result in higher premiums, it’s important that you take action and find an alternative insurer immediately so you can avoid a lapse in coverage.
Frequently Asked Questions
<p>Yes, you can still purchase an auto insurance policy after you receive a nonrenewal or cancellation notice. But the reason your original plan was nonrenewed or canceled might make it more difficult for you to obtain new coverage. If you have too many speeding tickets or were convicted of a DUI or DWI, you’ll be considered a high-risk driver and may get denied coverage or be forced to settle for higher premiums.</p>
<p>If you receive a notice of nonrenewal, contact your car insurance company for more details. They can explain their stance, and you may argue your case if you believe it’s unfair. If you don’t receive the type of response you’re hoping for, you could always discuss the situation with your state insurance department.</p> <p>If your nonrenewal is warranted, don’t wait to shop for a new insurance policy. Your goal should be to find car insurance from a different provider and ensure it goes into effect before your current coverage ends.</p> <p>This way, you can avoid a coverage lapse and the risk of driving illegally or getting into an accident without car insurance. Remember to explore and compare all your options so you can make an informed decision.</p>
<p>While every state is different, most states require a car insurance company to notify you of nonrenewal in writing. It might also have to inform the Department of Insurance or a similar regulatory body in the state.</p> <p>When it comes to timing for nonrenewal notices, this varies as well. In Nebraska, for example, auto insurance providers must send their notices 60 days before a policy expires. In Ohio, it’s 45 days. By notifying you ahead of time, your insurance company is giving you enough time to find a new policy.</p>
<p>You may receive a nonrenewal notice that you feel is unwarranted. If this happens, don’t hesitate to reach out to the auto insurance company directly. Once you do, be prepared to share any information or documentation to explain your stance and disprove any incorrect statements.</p> <p>If the provider won’t renew your policy despite your dispute, you can involve your state insurance agency and ask for an insurance hearing, depending on where you live. Keep in mind that in some states, you can only dispute a nonrenewal if the insurer fails to follow the state’s guidelines for the nonrenewal process.</p> <p>You might also have a limited amount of time to dispute the renewal. Do some research to find out the time frame in your state so that you don’t miss the deadline.</p>
<p>Contrary to popular belief, an auto insurance nonrenewal isn’t the same as a cancellation. A nonrenewal is when your insurance company discontinues your policy at the end of your insurance coverage period. Cancellation, on the other hand, is usually when your insurance provider cancels coverage in the middle of the policy term.</p> <p>Regardless of whether the auto insurance provider decides to cancel or not renew your policy, you’ll receive a written notice with an explanation in advance. The time frame for this notice will depend on the unique circumstances and laws in your state.</p>
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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.
