One of the questions we receive frequently is in regards to the difference between a nonrenewal of your insurance policy versus a cancellation of your insurance policy.
There are some major differences between the two that can help you avoid potential headaches and frustration in the future.
For example, did you know that most states do not allow insurance companies to cancel a policy that has been in force for more than 60 days unless:
- You fail to pay the premium
- You have committed fraud or made serious misrepresentations on your application.
Nonrenewal, however, is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days’ notice and explain the reason for not renewing before it drops your policy. If you think the reason is unfair or want a further explanation, call the Colorado Division of Insurance. They can work with both you and the insurance company to resolve any disagreements.
Insurance companies can use any number of reason for canceling your policy. Your policy may be cancelled because of prior claims or an increased risk you present to the insurance company. However, they can also cancel your policy because they no longer wish to write that type of insurance or they may be scaling back on the number of policies they want to write in your area.
A nonrenewal is not the end of the world. Our agency specializes in finding coverage for families whose policies are being nonrenewed and we can help you find the right coverage you need without increasing your premium.
If you have any questions, please feel free to give us a call.