Dealing with Insurance Policy Cancellations and Non-Renewals: Your Options and Rights
If your insurer cancels your policy or refuses to renew it, it can be a scary situation and you might feel at a loss about what to do next. Understanding the options and rights available to you can help put you back in control of the process – so read on to learn about what to do if your insurer cancels or refuses to renew your policy.Ask Your Insurance Provider Why Your Policy Was Cancelled or Non-Renewed First, find out from your insurer why you were cancelled or non-renewed. Some common reasons include excessive claims, revised underwriting rules, changed risk classification, and policy condition violations. Once you know the cause, you will have a good idea of your best course of action.
Consider the options: Once you’ve ascertained the rationale for the policy change, consider the options. Shop with other insurers to find alternative cover. Obtain quotes, weigh up the policy features and choose a replacement policy that fits your needs and budget.
Appeal: Maybe you don’t think the insurer’s non‑renewal or cancellation is supported by the evidence, or they’ve gotten some of the facts wrong. If so, you can appeal the decision. Submit evidence to support your appeal, for example, evidence of improved risk factors or correction of errors in your insurer’s file.
Help from your state insurance department: If you can’t resolve the issue directly with your insurer, your state insurance department is there to help. It can answer questions, mediate disputes, and make sure you’re treated fairly as a policyholder.
Review State Laws and Regulations: Understanding your state’s laws and regulations regarding insurance policies, including cancellations and non-renewals, is quite important. Some states’ laws protect consumers from insurance continuation cancellations without cause and set guidelines for renewal, including notification processes.
Know the grace period: If your insurer terminates the policy, the company is mandated to provide a period of grace, usually around 30 days. This is a time during which you could buy another policy and avoid having your coverage lapse. Use the grace period when your policy is cancelled: However, it’s incumbent upon you to use the grace period to your advantage and take every reasonable step to get new coverage.
Getting your insurance policy cancelled or non-renewed can be a discombobulating experience, regardless. Don’t panic, but work to be well-informed, and proactive. Find out why your insurer is dropping you and pursue your other options. Even better, seek counsel from your state’s insurance department to really understand your rights and duties (and don’t forget, these vary state by state). Use the grace period to find an insurer that suits your needs and transfer your policy without a lapse in coverage. Take the initiative to become educated, shop smart, and ensure you’re properly protected moving forward.
