What Is the Difference Between Auto Insurance Cancellation and Non-Renewal?

Drivers who have difficulty in purchasing auto insurance run the risk of multiple citations or perhaps even suspension of a driver’s license.

Cancellation of Auto Insurance:

Auto Insurance providers may cancel a driver’s auto insurance policy for a number of reasons.  The most common reason for a cancellation of an auto insurance policy occurs when an individual misses an installment payment. Most auto insurance agents and auto insurance providers provide a grace period for missed or late payments. To avoid the risk or potential of having an auto insurance policy canceled, drivers should avoid when at all possible being late on auto insurance payments. Another reason an auto insurance agent or an auto insurance provider may cancel a driver’s auto insurance policy misrepresentation of a driving record or omitting or supplying false information regarding driving history.

Non-Renewal of Auto Insurance:

Although cancellation of an auto insurance policy can happen at any time, a non-renewal occurs at the end of the auto insurance policy. The auto insurance agent or the auto insurance provider notifies the driver that they have chosen not to renew the auto insurance policy. Non-renewal of auto insurance generally occur when the auto insurance provider belies that the driver is too high of a risk; receiving a violation of driving under the influence (DUI) or receiving multiple speeding violations are two of the most common reasons auto insurance providers will site as reasons for non-renewal.

Whether a driver’s auto insurance has been cancelled or non-renewed by an auto insurance provider, other auto insurance providers may factor this in when deciding whether or not to offer a new auto insurance policy to a driver.

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