Okay, so you’re in a bit of a pickle. You just found out that your car insurance company…is no longer going to be your car insurance company. Maybe you’ve been nonrenewed or maybe you’ve been canceled. Either way, the bottom line is that you soon will be without insurance. But are nonrenewal and cancelation the same thing? Not exactly. We’ll explain why these two pickles are different and how you can react to each.
What is nonrenewal of an auto insurance policy?
The thing about insurance is that your policy doesn’t last forever. It expires after a set amount of time. And when it’s due to expire, you have to renew your policy. Nonrenewal happens when you or your insurance company decide not to renew your policy when it expires.
If it’s your insurance company that’s deciding not to renew the policy, they have to give you plenty of notice – how much notice is determined by what state you live in. The insurance company also has to tell you why they have chosen to nonrenew your policy. (No, they didn’t just decide to leave you high and dry on a whim. They’ll have their reasons for nonrenewing your policy, and they’ll let you know why.)
Why was my car insurance nonrenewed?
As we said, the insurance company doesn’t just decide to nonrenew you just because. Some common reasons that an insurance company might decide to nonrenew your insurance policy are…
- The insurer is simply not going to offer that line of coverage anymore.
- The insurance company has decided to scale back on that line of coverage in your area.
- You represent more risk to the insurance company now (possibly because you’ve filed too many claims in your policy period.)
If you have questions or you think their reason for nonrenewing you is completely unfair, you can call the insurance company and ask them for clarification or more explanation. Find out more about the situation.
After you’ve been nonrenewed, you might not have too much difficulty getting new insurance (and you do have to get new insurance – remember, you’re required by your state’s laws to carry insurance to legally hit the road.) However, your policy may be slightly more expensive than what you were paying before. Give yourself enough time to compare insurance rates and get quotes from a few different companies so that you can manage your rate.
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What does it mean if your car insurance gets canceled?
If your car insurance gets canceled, your situation might be a bit stickier. Basically, that means that you or your insurance company is ending your coverage…soon. Before the policy expires.
Why was my car insurance canceled?
There is a very specific set of reasons that will allow an insurance company to cancel your policy if it’s been in effect for over 60 days. An insurance company can cancel your car insurance policy if…
- The premium has not been paid.
- There is fraud.
- There is significant misrepresentation on the application.
Once again, you should get plenty of notice if you’re going to be canceled However, it might be more difficult to get new insurance after you’re canceled because other insurance carriers will see you as a higher risk to insure. (They kind of want to be paid, after all.)
If you’ve been canceled because you haven’t paid your premium, you might be able to get your coverage back by paying for a year’s worth of coverage up front. You’ll have to talk to your insurance company and see if there’s anything they can do. If that’s not going to be an option, you might have to opt for high-risk car insurance instead.
It’s again important to note that you’ll need to get new coverage. If your car insurance lapses, you’re essentially driving without insurance, which is not good – you can get in big trouble if you’re caught because it’s against the law. Also, if you were to hit someone or cause an accident, you’d be on the hook for covering the expenses you’re legally obligated to give to them. Bottom line: it’s really not a great idea to try to slide by without car insurance.
So, that’s the difference between your car insurance being canceled and your car insurance being nonrenewed. Being nonrenewed just means that you or the insurance company decided not to renew your policy when it expires. Cancelation means that your insurance company is ending your coverage before its expiration date. Either way, the time to start the hunt for new insurance is sooner than later.
We can help with that. Our agents can help you go over your insurance options and get quotes for your car insurance. You can get started with your quotes by filling out our online quote form or giving us a call today.