Have you suddenly found yourself without auto insurance but don’t understand why? Insurance companies can decide not to renew or cancel an auto policy for several reasons.
Difference between nonrenewal and cancellation
Nonrenewal and cancellation both result in auto coverage loss but occur differently and impact future coverage.
A nonrenewal occurs when an upcoming insurance policy is about to expire, and an insurance company decides not to continue auto coverage. During this time, the insured should look for a new insurer to avoid a lapse in coverage.
A cancellation occurs when an insurance company terminates a policy before the policyholder’s expiration date, leaving the policyholder without coverage.
Common reasons for nonrenewal
An insurance company is not required to renew a driver’s auto policy and may not for reasons related to a person’s driving record, claims history, or changes in their risk profile. As an example, in the state of Massachusetts, insurers can cancel an auto policy at any time for:
- Nonpayment of premium Suspended or revoked license or vehicle registration of the policyholder or any household member who usually operates the vehicle
- Traffic violations
- Multiple accidents
- Multiple claims
- Fraud or providing false information on an insurance application
- The policyholder fails to comply with the carrier’s request for a vehicle inspection
Other reasons for a nonrenewal could be beyond your control, like if an insurer no longer offers policies in your area or if you move to a new location that the company does not geographically cover.
An insurer can also be in the nonrenewal category if they decide to switch car insurance companies or sell their car and no longer need insurance.
Common reasons for cancellation
In Massachusetts, an insurer can cancel an auto policy for several reasons up to 90 days after renewal or effective date. A couple of those reasons include:
- The insurance carrier is generally reducing the volume of insurance it is writing, for instance, if an insurance carrier is choosing not to write insurance in a certain state any longer.
- If you did not complete a renewal application and return it to your insurer at least 30 days before the expiration date of your previous auto policy.
What to do if your car insurance is not renewed
Should you get a notice of nonrenewal, your insurance company will provide you the reason(s) why they decided not to renew your policy, but you should still contact them immediately to see if the company can rectify the situation to avoid having a lapse in coverage. Before you call the insurance company, have your policy number and documents ready and any previous claims you may need to discuss.
If the insurance company will not renew your policy, you must find a new company immediately. Otherwise, you will be without auto insurance coverage when the current policy ends.
What to do if your car insurance gets cancelled
Canceling a car insurance policy is much more serious than a notice of nonrenewal because it means the auto policy is no longer valid. If this happens, you must contact the insurance company immediately to find out why the company canceled your policy and see if they can reinstate it.
While laws vary by state, most require drivers to be provided ample notice of a cancellation before it takes effect. Keep in mind that most states require car insurance to drive a vehicle. Without it, a driver can face fines, driver’s license suspension or revocation, or vehicle registration suspension. For these reasons, drivers must make sure they have adequate car insurance.
If the car insurance company maintains that your policy is canceled, you must immediately apply for auto insurance coverage elsewhere. When doing this, be sure to mention that the previous company canceled you and disclose the reasons why.
If you have a hard time getting a company to cover you, contact your state’s division or department of insurance. Some states, like Massachusetts, have specific insurance plans, such as the Massachusetts Automobile Insurance Plan (MAIP), which can help drivers get auto insurance if they can’t find a company willing to write them a policy.
How to avoid nonrenewal or cancellation
There are several ways to avoid nonrenewal or cancellation of an auto policy to ensure uninterrupted auto insurance coverage. Some of those ways include:
- Paying your premiums on time
- Making sure your auto policy is up to date
- Disclosing accurate information to your insurer
- Maintaining a good driving record
We hope you found these tips helpful. To avoid any issues with your auto insurance, be sure to have your independent agent review your policy occasionally. If you are not a MAPFRE customer yet, you can get a fast, free quote today on your Massachusetts car insurance to get outstanding coverage at a great price.
