What to Do If Your Insurance Policy Isn’t Renewed (And Why It Happens)
If you’ve recently received a notice that your insurance policy won’t be renewed, you might be wondering what it means and what to do next. In this post, we’ll break down the key reasons for non-renewals, the difference between a non-renewal and a cancellation, and how you can secure new coverage without stress.
📺 Watch the video below for a quick explanation, then keep reading for more details!
What Is an Insurance Non-Renewal?
When you purchase an insurance policy, it’s essentially a contract between you and the insurance company. The insurer agrees to provide coverage for a specific time period—usually 6 or 12 months—as long as you pay your premiums and provide accurate information.
At the end of that term, your policy doesn’t automatically continue forever. Instead, the insurance company reviews your policy and decides whether to offer you another term. If they choose not to extend coverage, that’s called a non-renewal.
Non-Renewal vs. Cancellation: What’s the Difference?
A non-renewal is different from a cancellation in a key way:
• Cancellation: The insurance company terminates your policy before the term is over. This only happens in specific cases, like non-payment or misrepresentation on your application.
• Non-Renewal: The insurance company decides not to offer a new policy after your current term expires. This is legal, and insurers don’t need a reason to stop offering coverage—though they often have one.
The good news? You still have time to find new coverage before your policy expires!
Why Insurance Companies Choose Not to Renew Policies
There are several reasons why an insurer may decide not to renew your policy. Some of the most common include:
1. A Claim Was Filed on Your Policy
Insurance companies assess risk, and if you’ve filed a home, auto, or other insurance claim, they may view you as a higher risk to insure.
💡 Example: If you had a major water damage claim in the past year, your insurer might decide they no longer want to offer coverage.
2. Changes in Underwriting Guidelines
In recent years, insurance companies have tightened their underwriting guidelines, meaning they’ve become more selective about which policies they renew.
This can result in non-renewals for reasons beyond your control, like:
✔ The insurance company raising its risk standards
✔ A new rule about specific home features (e.g., old roofs)
✔ Stricter guidelines for certain locations
3. The Insurance Carrier Is Leaving Your Area
Sometimes, an insurance company decides to stop doing business in certain states or regions. This isn’t personal—it’s a business decision based on financial or risk factors.
💡 Example: In some coastal states, insurers have pulled out due to hurricane risks, leaving homeowners needing to find new coverage.
4. You No Longer Qualify for Standard Coverage
Insurance companies typically offer two types of coverage:
• Standard Carriers: These are the major insurance companies regulated by the state, offering typical home and auto policies.
• Non-Standard Carriers: These companies specialize in higher-risk policies but may offer fewer coverage options or higher rates.
If you don’t meet the qualifications for a standard policy anymore, you may have to temporarily switch to a non-standard carrier until your risk profile improves.
What to Do If Your Policy Isn’t Renewed
If you receive a non-renewal notice, here’s what to do next:
1. Don’t Panic – You Have Options
A non-renewal doesn’t mean you can’t get insurance again—it just means you need to shop around.
2. Contact Your Insurance Agent Immediately
Your agent can:
✔ Explain why your policy wasn’t renewed
✔ Check if another standard carrier will insure you
✔ Help you compare coverage options
3. Explore New Coverage Options
If you can’t get a standard policy, you might need to:
• Look for another standard carrier that will accept you
• Consider a non-standard carrier as a temporary solution
• Improve your risk profile (e.g., repair your roof, avoid claims)
4. Take Action Before Your Policy Expires
Your non-renewal notice will include an expiration date—make sure you secure new coverage before that date to avoid a lapse in insurance!
Final Thoughts: A Non-Renewal Isn’t Permanent
If your policy isn’t renewed, it’s not the end of the world. It simply means you need to find a new insurance provider. While rates may increase temporarily, many factors—like claim history or market changes—can improve over time.
Need help finding coverage? Contact us today, and we’ll help you navigate the process!
