Ask Sil

Non-renewal of an insurance policy simply means not continuing with an existing policy after the expiry of its term. Any insurance policy may be governed by the state laws. If an insurance company chooses not to renew a certain policy, it has to follow certain procedures.

There are few chances that your homeowners insurance policy will be cancelled by the insurance company. But if your insurance company chooses not to renew your home owners policy they must provide notice for a certain number of days and also explain why they have chosen not to renew your policy. If you have done something that adds a potential safety hazard on your property and that would invite a risk on the insurance company, the company may be allowed to cancel your insurance policy. Insurance companies usually also deny claim because the amount is mostly big.

The kind of home you buy and the kind of lifestyle you follow may affect your homeowners insurance policy. But if you file too many insurance claims it may result in non-renewal. If it is a house you are buying, make sure you are completely aware of the history of the house. If the house you are buying has a history of several claims, you may find it difficult or even impossible to find a suitable home insurance policy.

You may even raise your deductibles. By doing this you can reduce the amount of premiums that you pay and more importantly it will also reduce the risk of non-renewal when filing a claim.

Auto insurance policy holders must maintain a good record with the insurance providers. It is your responsibility to keep your payments up-to-date. However, lapses may occur sometimes. If your insurance provider decides that you are no longer worth the coverage, he can simply choose non-renewal of your insurance policy. If you have had poor driving records or have made abundant claims, you may be adding to the reasons behind why your insurance company would choose not to renew your insurance policy. If this does happen, the company is supposed to let you know a month in advance about its decision of non-renewal of your auto insurance.

Auto insurance cancellation is a more serious issue and your policy may get cancelled due to any violation in terms of the agreement you have with the insurance company. Most of the auto insurance companies reserve the right to cancel a policy with itself, be it for driving under influence of alcohol or late payment or any other fraud. If you want to avoid cancellation of your auto insurance policy, you may set up an automatic payment system. You can use online banking services to be able to use the automatic payment system.

A policy gets cancelled under 2 circumstances:

1. Failure to pay premiums or
2. Commit fraud or make inaccurate application

An insurance company cannot cancel any policy that has been active for more than 60 days. But the only exceptions to his rule are your failure to pay timely premiums and any fraudulent activity or misrepresentation of facts when applying for insurance. If your policy gets canceled, you may have to be at risk of paying a higher insurance rate in the future.

Either you or your insurance company may decide not to renew a certain policy after expiry. A company may decide not to renew a policy if they want to drop that line of insurance or maybe because the company has decided to write fewer policies in your location. However, if your insurance company refuses to renew your policy you will not necessarily have to pay higher premium at a different company.

Knowing what to do when your insurance company wants to cancel your policy or decides not to renew your policy always helps. You must be aware of your rights so that you can have a fair judgment in such a case or when you file a claim. Non-renewal can be opted both by the insurer and the insured. But both have certain procedures to follow without which the entire process will be unjustified.