While dealing with your insurance company, you might have run into the question of insurance cancellation vs. non-renewal and wondered what the difference was. Though they have several similarities on the surface, the two actually may occur for different reasons and have different ramifications for you. Here are some of the key distinctions.
Non-Renewals Could Occur for a Wide Range of Reasons, Not All Related to Your Record
You may be under the impression that non-renewals are usually due to some fault on the part of the policyholder, but this is only sometimes true. In fact, they could occur for a wide range of reasons, such as:
• Your geographical location
• The company eliminating one type of insurance offering
• A significant risk on your driving record
Cancellations Don’t Often Occur After 60 Days of Coverage
By contrast, a policy cancellation generally doesn’t happen after your first 60 days of coverage except for in a few select cases. These can include license suspension, insurance fraud or non-payment on your part.
Insurance cancellation vs. non-renewal can seem like a tricky distinction to nail down, especially if you’ve encountered one or both with an insurer and weren’t sure what the difference was. Understanding these key distinctions could help you prepare for handling questions with your insurance company.