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What's the difference between cancellation and nonrenewal?
There is a big
difference between an insurance company canceling a policy and choosing
not to renew it. Insurance companies cannot cancel a policy that has
been in force for more than 60 days except when:
- You fail to pay the premium
- You have committed fraud or made
serious misrepresentations on your application.
Nonrenewal is a different matter. Either you or your insurance company
can decide not to renew the policy when it expires. Depending on the
state you live in, your insurance company must give you a certain
number of days' notice and explain the reason for not renewing before
it drops your policy. If you think the reason is unfair or want a
further explanation, call the insurance company's consumer affairs
division. If you don't get a satisfactory explanation, call your state insurance
department.
The company may have decided to drop that particular line of insurance
or to write fewer policies where you live, so the nonrenewal decision
may not be because of something you did. On the other hand, if you did
do something that raised the insurance company's risk considerably,
like committing fraud, the premium may rise or you may not have your
policy renewed.
If your insurance company did not renew your policy, you will not
necessarily be charged a higher premium at another insurance company. |
© Insurance Information Institute, Inc. - ALL
RIGHTS RESERVED -
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