An insurance company has the option to cancel your policy within 60 days of the effective date. First, of course, they will give you notice of the cancellation, allowing you time to find a new policy.
Why would an insurance company choose to cancel a policy?
The biggest reason for a policy cancellation would be not making payments. There are other reasons, too, including:
The customer not meeting guidelines, having too many claims, criminal charges, plus more. Failure to meet the basic requirements of your policy can result in a cancellation. For a homeowner’s policy, neglecting to make repairs, failure to meet fire codes, and leaving the home vacant for thirty days can also be reasons a company would cancel you.
Another option for insurance companies is non-renewal, which means that the company won’t offer you a new policy when your current one is up. Reasons behind non-renewal are similar to cancellation.
If your policy is cancelled or non-renewed, it can be difficult to find another carrier who is willing to insure you. Be sure to always make your payments on time and follow the guidelines.
Sometimes, nonrenewal and cancellation are beyond your control. For example, a carrier would have to cancel your coverage if that specific company decides to no longer offer that product. Or, it could even be because the carrier changed their underwriting guidelines regarding what kind of coverages they will provide. Sometimes, these things are beyond your control.
The purpose of this blog is to inform you about that basic fact of insurance that is cancellation.