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.
Call Insure on the Spot
For more information about Non Renewal notices in Illinois and what to do next, give us a call. Insure on the Spot is the leader in Chicago Auto Insurance and SR22 Insurance Coverage.