Published October 5, 2023 • Encompassinsurance.us • Buffalo, NY, USA
In today's market, insurance non-renewals are becoming rather commonplace. Economic pressures, supply chain gaps and general market panic can cause insurance companies to tighten their underwriting and make changes to their operations. For you as a policyholder, this can have undesirable consequences, but it may not be the end of the road. Understanding what a non-renewal is, and how it is different from a cancellation, can help you make sense of what is happening with your policy and what you can do from here.
What is a non-renewal of insurance?
An insurance non-renewal refers to the termination of an insurance policy by the insurance company at the end of its term, with a decision not to extend or renew the policy for another term. This can occur for various reasons, such as changes in the insured's risk profile, increased claims or losses, or shifts in the insurer's underwriting guidelines or business strategies. The insurer typically notifies the policyholder in advance, often within a specific timeframe before the policy's expiration date, informing them of the non-renewal and providing details on the reasons behind the decision. As a result, the policyholder must seek alternative insurance coverage to maintain protection for the insured risks beyond the current policy term.
What is a cancellation of insurance?
A cancellation is a termination of an insurance policy before the policy term's expiration date. Cancellations can happen for various reasons, such as non-payment of premiums or policy violations, and they take effect immediately or within a specified notice period. While a non-renewal is often a proactive business decision by the insurer, a cancellation is usually a result of policy violations or non-compliance by the policyholder.
What to do if you receive a non-renewal notice
If you've received a non-renewal notice from your insurance company, it's important to take proactive steps to secure continued coverage and protect your interests.
Carefully review the reasons provided for the non-renewal in the notice. Understanding the insurer's rationale can help you address any issues that may have led to the decision. For example: If you're being non-renewed for a property's condition, consider addressing the property's needs prior to seeking other insurance.
Next, start exploring alternative insurance options by contacting other insurance providers. It's crucial to do this well in advance of the expiration date of your current policy to ensure a seamless transition in coverage (At least 30 days).
As mentioned before, non-renewals can often be addressed and corrected. Cancellations can as well, but the capacity in which the policy cancelled will determine the ease of covering the risk in the future.
Consult a Professional
If you have received a non-renewal or cancellation on your insurance, we recommend speaking with one of our knowledgeable staff at Encompass Agency. Encompass Agency agents work with many insurance companies to negotiate coverage on your behalf. We can help address the terms of your non-renewal or cancellation and attempt to find a solution to your insurance problems.
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