What are the parameters considered by the insurance companies in deciding about the renewal or cancellation of car insurance policies?


Insurance companies would invariably evaluate all the risks normally associated with every policyholder. Based on their assessment, they would determine whether a particular person is a ‘good risk’ or ‘bad risk’. Subsequently, they would decide whether the policy should be renewed or cancelled. In general, the insurance companies would primarily look at the past claims of that person, the driving history, and credit history, along with several other factors. If a person had not filed frequent claims, had maintained a spotless driving record, and the credit history is satisfactory with no bankruptcy, then there is no possibility of the car insurance policy being cancelled. If there is any deficiency in the above factors that are not serious, then the insurance company might renew the policy on higher premium payments. On the other hand, if the insurer feels that the past record had been poor, the policy would not be renewed.