If your insurance company doesn’t want to insure you any longer, there are two different ways they can legally go about extricating themselves from the policy. Cancellation is the most extreme of the two. In the first few months of a policy, insurance companies can cancel the policy for any reason, although this is uncommon.
The most common reasons an insurance carrier will cancel a policy include:
- Late payment
- The loss of your license (because of a DUI or other offense)
- Or a determination that you provided inaccurate personal information when the policy was created
However, because cancellation is a strike against your insurance record, it’s important to do everything you can to avoid it. Making payments on time is crucial, as is avoiding driving under the influence and being as forthright as possible when providing information to prospective insurers. It might be tempting to lie about recent traffic offenses or tickets, but in the long run, this will harm the health of your credit and driving record.
When your insurer cancels your policy, it stays on your insurance record for five years. However, if a driver accumulates three cancellations in one year, it will be almost impossible to find another carrier willing to take you on as you are now a “high-risk” insured. You’d have to go to a high-risk carrier and pay up to five times the normal car insurance rates you once paid at a standard insurance carrier.
Non-renewal is a different story, and doesn’t carry the severe consequences that cancellation does. When your car insurance policy has run its course, your insurer may decide that they no longer want to insure you. Generally, an insurer will issue a non-renewal notice if:
- You have filed multiple claims in a short period of time
- Your credit rating has declined sharply, and your current insurer sees you as a liability
- The carrier is restructuring its insurance lines of business or pulling out of a certain line and is discontinuing your policy through no fault of your own
While you searching for a new policy, it’s not nearly as difficult to bounce back from a non-renewal as it’s a cancellation.
When it comes to non-renewals and cancellations, many states have different laws on how and when an insurance company can non-renew you or cancel your insurance policy. There are protections in place, so insurance companies do not just leave insureds high and dry. Below is an example of the different ranges of non-renewal and cancellation required notice period.
Get Central Oregon Car Insurance Here
For affordable Central Oregon Car Insurance contact the Farnsworth Agency today by calling us at (541) 318-8835 or click here to connect with us online.