Non Renewal of Auto Insurance
You just got notified that your auto insurance company is non-renewing your policy. What exactly does that mean? Is a non-renewal the same as cancellation? The answer is no, but neither status is beneficial to you as a motorist.
What is Non Renewal Auto Insurance?
A notice of non-renewal is when your auto insurance company informs you that they will not be offering you insurance again for another policy term effective at the expiration of the current policy. A non-renewal is different from a cancellation. A cancellation is the termination of your policy before your renewal date. Even though both of these events have some similarities, there are far more harmful consequences for a motorist to receive a cancellation vs. a non-renewal.
What Happens When Your Receive a Non Renewal Notice?
An auto insurance company can issue you a non-renewal for a variety of reasons, but the amount of time your policy was in force does by law affect the actions taken by the insurance carrier. The time measurement regarding non-renewals is based on whether your policy was in force for fewer than or more than 5 years.
Policy In Force in Less Than 5 Years
If you receive a non-renewal notice on your auto insurance during the first 5 years of the policy, the insurance company is legally allowed to take such action for any reason except for the following.
- Age of Gender
- Race, Color or Creed
- Occupation or Employer
- Marital Status
- Physical handicap (as defined by the law)
- Solely Based on Credit Score
The auto insurer must provide you with at least a 30-day written notice, sent to your last known address. The notice sent by the insurance carrier must clearly explain the exact reason for the non-renewal. They are obligated by law to provide a specific, factual basis for renewal or non-renewal.
Policies of 5 Years or More
You can still receive a notice of non-renewal even if your policy has been in effect longer than 5 years, but there are more limitations on the insurance company when taking such action.
In most cases, the insurance company can non-renew your policy for any reason (except for those stated above) as long as they provide you with a 60 days’ written notice. However, the law does allow 30 days’ notice in cases of fraud, violation of policy terms, certain health conditions, criminal convictions and other situations.
How to Avoid A Non-Renewal Of Auto Insurance
Here are some good tips regarding how to avoid a non-renewal action.
- Maintain a good driving record.
- Avoid making fraudulent claims or statements to the insurance carrier.
- If you have a health condition that could affect your driving, get a medical clearance from your doctor.
- Avoid brushes with the law.
Getting a notice of non-renewal on your auto insurance is not desirable. Even though it is not as dire as being cancelled prior to your renewal date, you want to avoid non-renewal status. You most likely will have to pay much more for a replacement auto policy should you get non-renewed on your prior contract.
Regardless of the duration of your policy, you as a motorist have a right to schedule a hearing with the Illinois Department of Insurance about your situation. You must mail a hearing request to the State at least 20 days prior to your non-renewal date. You also might be eligible to buy insurance through the Illinois Automobile Insurance Plan if you cannot find coverage elsewhere.