Non-renewals can be unexpected and confusing to many people. A non-renewal on your car insurance
means your current insurance company no longer accepts you or another driver on your policy as a driver risk. You will have to find coverage with another carrier by the time your policy renews. Basically, your insurance company is cancelling your insurance
policy. Non-renewals are usually issued for three common reasons.
3 Causes for Non-Renewal
If you have recently received a DUI or have been racking up the speeding tickets, there is a good chance you will be seeing a non-renewal notice from your insurance carrier
real soon. Preferred carriers often non-renew drivers with bad driving records because the likelihood of a large claim is high. Preferred insurance carriers
will not insure high-risk drivers
because the potential risk is detrimental to its other clients.
Multiple at-fault claims
can warrant a non-renewal letter from your insurance carrier. The typical rule when it comes to insurance is you never want to have three at-fault claims within three years of each other. If you run into a streak of bad luck and have a couple within a short time frame, you had better be very careful the next three years. Once you file a third at-fault claim within three years, more than likely you will be receiving a non-renewal notice.
The majority of insurance agents are only licensed in one state. Insurance policies need to be issued in the state you reside. If your insurance company is notified of your move out of state, you will be non-renewed. The post office can notify the insurance carrier, or you could notify the insurance carrier of the move yourself. Don't let this rule catch you off guard. Plan on switching car insurance when you move out of state.
What to Do if You Receive Notice of Non-Renewal
Your agent can shed some light on what is happening with your insurance policy. If you receive a non-renewal notice in the mail, your agent should be the first call you make. It is possible a mistake has been made. If the cancellation is due to another driver on your policy, your agent may be able to set your policy up with a driver exclusion. The excluded driver
will have to purchase another car insurance policy to remain covered.
It may not of been in your plan, but if you are being forced to switch insurance carriers, you need to shop around
. Take the time to get a few different quotes. Independent agents
have the ability to check with different car insurance carriers. Chances are if you are already insured with an independent agent you will be able to keep your business with the agent and only switch insurance carriers.
It is important to switch your insurance carrier in a timely manner. A lapse in coverage can seriously be bad. It is possible to set up a new policy well in advance of your non-renewal date and request that your new policy starts on the required day.
Non-renewals need to be taken seriously. Whether you clear up the issue with your insurance carrier or you start a new car insurance policy with another carrier, action needs to be taken. If your policy is being non-renewed because of your driver risk status, you can expect your insurance rates to go up. Pay close attention to your driver risk status so you can prevent receiving a non-renewal in the mail.