Is There A Difference Between Cancellation And Non-renewal Of A Car Insurance Policy?

When you get great car insurance coverage you want to keep it, but sometimes situations arise where you are forced to give it up. For example, your car insurance could be canceled due to your driving record, or your policy could come up for non-renewal. Not everyone understands the differences between these two scenarios and assumes they mean the same thing, but the reality is that they do not. A car insurance cancellation and a non-renewal are different things entirely, and understanding what they both mean can help you determine what steps to take next if either of these things happens.

No matter which scenario you find yourself in, you'll need to locate another insurance company to obtain coverage. However, how you do that and how much you will pay in the future will depend on why you're looking for new insurance in the first place.

One reason may be that the company you had your car insurance through decided to cancel your policy. Companies can do this at any time, and they aren't required to notify you in advance or allow you to appeal their decision - although some of them will do this out of courtesy. However, if your car insurance is canceled, it's usually because you have a poor driving record or serious credit problems. If you acquire a lot of tickets or accidents, you could easily be seeing a car insurance cancellation in your future. That's due to the fact that any company that offers car insurance coverage doesn't want to keep paying out money for your claims. Additionally, you could see a car insurance cancellation notice in your mailbox if you file bankruptcy or have other serious credit problems. This is because many car insurance companies consider this when determining what the risk of insuring you is.

A non-renewal isn't the same thing as a car insurance cancellation. Your non-renewal might not have anything to do with you, personally, or your driving record. Sometimes non-renewals come about because a company is moving out of offering car insurance coverage. Other times it's due to the fact that the company is no longer going to be offering car insurance coverage in a particular state or area. Unlike a car insurance cancellation, this is not a direct reflection on your insurability. It is strictly a business decision by the car insurance company.

Remain in the know about the plans your car insurance company has for you. And, regardless of the situation you find yourself, it will be imperative to take whatever steps are necessary to maintain some sort of car insurance coverage. Failing to do so will cause you more problems obtaining coverage in the future.

Free Insurance Quotes