What's The Difference Between Auto Policy Cancellation & Nonrenewal?

Learn why your insurance might be denied.

There's a big difference between losing a policy and deciding on terminating it.

An auto insurance cancellation.

Insurance companies cannot cancel an insurance coverage that has been in effect for more than 60 days unless there's a problem:

• Do not forget to pay the premium.
• You have committed fraud or otherwise made misrepresentations on your application.
• Your driver's license has been suspended or revoked.

An Auto insurance non-renewal

Either you or your insurance provider may choose to not renew the policy when it expires. Your insurance company must provide given you a number of notice and explain the reason for not renewing the policy before it drops your policy's (the precise time frames and rules depend on your state of residence).

Your insurance company may choose not to renew your policy for a number of reasons. It may have decided to scale back its provision of utility companies or areas where you live.

However, non-renewal can also be the result of your record or your actions. To raise the insurer's risk substantially, you might engage in dangerous activities like drunk driving.

If your insurance company tells you that your policy is not being renewed, be sure to call them to complain about it. If you don't receive a sufficient explanation, contact your state's insurance department.

Nonrenewal at one company doesn't guarantee that you'll be charged a higher premium at another company.