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What are the differences in cancelling my policy or choosing not to renew it?

 

 

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A very common misunderstanding is that both cancelling and non-renewal are the same. The only main difference between cancelling and not renewing a policy it is that cancellation can only take place with the company’s decision, and non-renewal could be your or the insurance company’s decision to not renew. Cancellation will completely end an existing policy right away, but a non-renewal will happen when the time period of the policy is over and is ready to be renewed.

 

There is one critical difference when insurance companies cancel the policy, and decide against renewing it. The insurance company can’t cancel the policy that’s been active for an excess of sixty days, except in the situation of:

 

•You failing to pay your premium

•You engaged in fraud, or had severe false changes on the application

 

With non renewal your insurance agency or you can decipher weather to not renew the policy at its end. According to the location you are in, your insurance agency must tell you within a set number of days before they can drop your policy. They must send you a notice and discuss the reasoning for choosing not renew the policy. If you believe the reason for not renewing is unjust or need further explanation, you should immediately phone the insurance company's consumer affairs department.

 

If your insurance company chooses not to renew your policy, they may decide to drop the policy of insurance, or decide to have fewer policies in the area you are located. So that means the non renewal decision could not necessarily have been from things you did. However, if you did something wrong that raised the insurance company's risk by a wide margin, such as multiple incidents in your home, the premium could rise, or your policy could be denied renewal.

 

Renewal means extending a time frame of the same policy. However, the insured may choose to renew the policy or not renew it. Even the insurance company can decide weather not to renew the policy because of the following conditions:

 

1. Increase in risk due to the insured high risk factor zone residence

 

2. Fraud was committed by the insured

 

3. Company comes up with new policies and decides to discontinue the older ones

 

If the insurance agency opted not to renew the insurance policy, you may or may not be offered a higher premium at different insurance companies.

 

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