If you were shocked to receive notice of car insurance nonrenewal in the mail, you might wonder what it means and how to respond. Insurance nonrenewal means your insurer has decided not to automatically renew your coverage on the expiration date. Instead, your coverage will expire—leaving you without car insurance.
To determine your next move, discover why your nonrenewal happened, what your rights are, the difference between a cancellation and a nonrenewal, and what next steps you might consider.
What Is a Notice of Nonrenewal?
You may have a three-month, six-month, or annual auto insurance policy, and just like any other subscription, it needs to be renewed when its term ends. But you or the insurer can choose not to continue your policy, allowing it to end on the expiration date.
In some states, there are different rules for policies that renew after six months versus those that continue after a year.
An insurer can also decline to renew portions of the policy. For example, in North Carolina, an insurer might decide not to renew your comprehensive and collision coverage if you have had several claims, even if some weren’t your fault. After sending a notice of nonrenewal, insurers in some states can renew your policy with another company in the same insurance group.
Possible Reasons for a Notice of Nonrenewal
Some states set forth acceptable reasons for nonrenewal—and while a few states limit those reasons, others let insurers use almost any reason to decline your policy’s renewal. Some states have different requirements based on how long you’ve had the policy. For example, if the same company has insured you for five years in Illinois, the insurance company can nonrenew a policy within 30 days of expiration for one of 27 reasons. But if you’ve been with the company for fewer than five years, the company can cancel for almost any reason.
Here are some of the reasons an insurer might not renew your car insurance policy.
Your Medical Issues
An insurance company might not renew a policy if a driver in the household develops a physical condition such as epilepsy that could affect their driving and doesn’t have a physician’s certificate testifying to their ability to drive safely.
Auto-Related Accidents, Thefts, and Convictions
A policy may not be renewed if the driver has a history of traffic accidents, speeding violations, or convictions for motor-vehicle-related charges. Such charges could be driving under the influence of alcohol or drugs, leaving the scene of an accident, or homicide or assault related to operating a vehicle. Nonrenewals may also occur due to points accumulated on your license or having reported several cars stolen.
You may also find your auto policy is not renewed if you have forfeited (jumped) bail—or if you have been convicted of a felony, criminal negligence resulting in death, auto theft, or a number of other charges.
License Suspension or Revocation
If your car registration or your license has been suspended or revoked, an insurer may nonrenew your policy.
Fraud or Misrepresentation
If your insurer finds out that you lied or intentionally misrepresented information when obtaining the original policy or your driver’s license, your policy might not be renewed. It might also not be renewed if you filed a false or fraudulent claim or helped someone else do so.
The insurer may not renew a policy if a vehicle is defective, hasn’t passed a required inspection, or is being used for purposes such as ridesharing or transporting flammable materials.
At times, a nonrenewal can occur simply because the insurer no longer offers insurance in your state or doesn’t cover particular categories. If you’ve moved from one state to another, the insurer may not renew your policy. A nonrenewal could also occur because you didn’t provide insurer-requested information for policy purposes. In some states, an insurer can nonrenew an auto policy if the nonrenewal is consistent with specific geographic underwriting standards and you have a poor driving record or payment history.
In some states, an insurer might be able to nonrenew a policy for any reason at all except for those based solely on your credit score or factors such as age, religion, gender, race, or marital status.
In many cases, the nonrenewal reasons apply to any household member or regular vehicle operator, not just the primary insured (i.e., the first person listed on the policy).
What Are the State Laws for Notification of a Nonrenewal?
Most states require the insurer to notify you in writing and include specific facts or reasons for the nonrenewal, such as the particular incident that led to the nonrenewal. In some states, the insurance company must also notify the regulatory body, such as the insurance commissioner.
The time frame for nonrenewal notification varies. For example, insurers must give you 30 days’ notice before nonrenewing your policy in Ohio, 45 days’ in most cases in Massachusetts, 60 days’ in Nebraska, and 45 to 90 days’ notice in New York. This advance notice gives you time to shop for a new insurance policy.
If you don’t pay your premium, the insurer may be able to nonrenew your coverage in a different time frame. For example, in Nebraska, an insurer only needs to give 10 days’ notice before nonrenewing your policy if you haven’t paid your policy premium. Pennsylvania requires no grace period at all.
Can I Dispute a Notice of Nonrenewal?
If you think the reasons for the nonrenewal are incorrect, you can contact the insurance company directly. Be ready to provide information or documentation to prove any statements are incorrect or that the insurance company isn’t following the state’s requirements.
If the insurance company won’t engage or still won’t renew your policy, depending on where you live, you might be able to involve your state insurance agency and request an insurance hearing regarding your nonrenewal. In other states, you can only dispute a nonrenewal if the insurance company didn’t follow the state’s guidelines or required steps for the nonrenewal process. You may have a limited amount of time to challenge a nonrenewal, so look up your state’s expectations and your eligibility to contest a nonrenewal.
In the past, states such as California have temporarily prevented insurers from nonrenewing in certain zip codes due to wildfires and extreme weather. If insurers didn’t renew policies, policyholders could contact the state department of insurance for assistance.
What If Your Coverage Is Denied?
If you can’t renew your policy with your current insurer, start shopping around for a new insurance policy as soon as possible, or speak with an independent insurance agent. If your insurance was nonrenewed due to a severe driving infraction, you might need to research high-risk insurance options.
What Are the Differences Between a Nonrenewal and a Cancellation?
An insurance nonrenewal is different from an insurance cancellation, although the differences once again depend on state law. In many states, a new insurance company is legally prevented from canceling your auto insurance—with a few specific exceptions—after 60 to 90 days. Here’s how:
|Reasons||Strictly limited in most states, mainly concerning fraud, nonpayment, license or car suspension, accidents, or a DUI||Insurers are frequently given more leeway regarding not renewing your policy in many states, including canceling for any reason at all|
|Notification requirements||May be shorter than the nonrenewal notification time frame, as little as 10-20 days||Typically provided within 30 to 60 days, but can also be as short as 20 days|
|Refund||You may receive a refund of unused premiums||Typically no refund because you’ve reached the end of the coverage term|
Rescission is one more way your auto insurance coverage can end. Allowed in some states, rescission means the insurance company voids your policy to the start date (and thereby rescinds your coverage for that period) before returning any premiums you’ve paid. Rescission might happen if you give an agent false information when applying for insurance.
Frequently Asked Questions (FAQs)
How long of notice does insurance have to give for nonrenewal?
The notice of nonrenewal time frame depends upon state law. While 45-60 days’ notice before the term expiration date is common, timing can vary widely—Louisiana’s notification requirements are only 20 days before the renewal date.
What are the damages for failure to provide timely notice of nonrenewal?
The consequences for failing to provide timely notice depend on the state. For example, if an insurer doesn’t offer 60 days’ notice in Wisconsin, it’s obligated to continue your coverage for the rest of the policy period or one year, whichever is less.
How do you elect not to renew auto insurance?
You can choose not to renew your insurance for any reason—or even change insurance companies—at any time. Contact your insurance company to let them know you won’t be renewing your policy. Nonrenewal may be as easy as a phone call or an online process, or you may need to send in a written letter. But ensure your new auto insurance policy is in place before you end your current insurance policy or you could wind up facing fines, fees, and financial responsibility for any accidents.
How far in advance can you renew your car insurance?
Typically, you can’t renew your car insurance until you’ve paid your renewal premium. The insurance company will send you a notification about a month before your renewal with your renewal rate. After you’ve paid the premium, you’ve effectively renewed your car insurance.