Why Did My Insurance Company Cancel/Refuse To Renew My Insurance Policy?


Insurance companies evaluate all risks typically associated with each policyholder to determine “good risks” or if your policy should be canceled or not renewed. They will primarily review your claims, driving, and credit history. The most common reason for cancellation is non-payment of premium, in which case the Company will generally give a time leeway to for the policy holder to make up for the shortfall. Coverage from another insurance company will also entail your policy with the first company to be cancelled (sometimes your new company will offer to send the cancellation notice for you). A letter of cancellation is also justifiable in the case the company learns of suspension or revocation of your driver’s license, an unlawful misrepresentation that was provided to get personal auto insurance coverage or numerous traffic violations within a relatively short period of time. 

The grounds for non-renewal may entail the following: termination of company operations in your locale, a member of the household who is not eligible for coverage driving a covered vehicle, a physical or mental impairment that affects that person’s ability to operate the covered vehicle safely, and multiple infractions, violations or conviction for drunken driving.

In the event of a cancellation or non-renewal of insurance policy, an insurance company is required to send a notice of cancellation/non-renewal to the insured party from 10 to 45 days prior to termination. State and Company bylaws define which processes a Company must follow if they want to remove a subscriber from coverage and are required to give a reason for the cancellation or non-renewal. This reason must also be given to the policy holder. If your insurance policy is cancelled before expiration of the time for which you have paid premiums, you are definitely entitled to a refund of the unused portion of your premium.

 Is it mandatory to get a car insurance? 

Remember, all states have at least some form of risk coverage for people who cannot get an insurance company to voluntarily insure them. This is because all licensed drivers are required to have insurance or protection in any form. The premiums are definitely high as you are considered a bad risk for the insurance company, but acceptance is always a guarantee. Always check with an insurance agent or ask your state insurance department about how to get assigned risk coverage. As with credit ratings, try sobering up and maintain a good driving record. Over time, you’ll be able to acquire a proper insurance policy.