Every driver must understand what auto insurance cancellation and non-renewal are. Cancellation of your auto policy can inhibit your ability to drive a car, so maintaining good standing with your auto insurance carrier is one of the principal responsibilities of driving. Although many people are careful about keeping their driving record clean and their car insurance premiums paid, it is not uncommon for a situation to arise in which a driver fails on one or both counts. If a lapse does occur, it is even more important to understand the difference between auto insurance cancellation and non-renewal. Here are some of the tips on non owners car insurance.
What Is Auto Insurance Cancellation and Non-Renewal?
Auto insurance non-renewal is what occurs when your policyholder decides you are no longer worth the risk of coverage. Poor driving records or an abundance of claims may contribute to the decision, but either way, you should be notified about a month in advance if such action is taken. Needless to say, future carriers don’t look favorably upon events such as these, so you may want to appeal through whatever means your carrier provides.
Auto insurance cancellation tends to be more serious, and can come about as a result of any violation pertaining to your agreement with that company. Whether the problem is late payment, arrest for DUI, or insurance fraud, many auto insurance companies reserve the right to cancel your policy at any time. Notice is required here as well, but you may still find yourself scrambling to land a new carrier without a lapse in your policy.
If either of these two situations occurs, it is essential to find new coverage as soon as possible. Without coverage, you cannot drive your vehicle. Shopping around for a new policy is your best option, but if you find yourself deemed “uninsurable,” you may need to turn to your state’s Automobile Assigned Risk Plan.
Avoiding Cancellation or Non-Renewal
The simplest way to avoid cancellation or non-renewal is to set up an automatic payment system in advance. Most online banking companies now let you pay insurance this way automatically, and you may be able to provide an additional backup with a savings account. Of course, if the problem relates to your driving record, higher rates in the future may be an inevitable consequence. Check out what short term insurance really means.
If you want to learn more about how auto insurance works and when you can switch policies, don’t be afraid to ask your agent these questions. An agent can explain what grace period you can expect in the event of a lapsed payment and can help to make clear exactly what auto cancellation and non-renewal are and when your carrier might choose either of these two options.
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