Cancellation Notice and Non-Renewal Notice - Whats the Diff?

Most of the time we head out to our mailboxes in the morning to see what the mail man has brought. Most of the time it is either bills, catalogues or sometimes an exciting competition or even a small gift from your credit card providers. Most of the time it is quite innocent with nothing much to scare you. But one fine day you go out and you get an official looking envelope from your insurance company. It looks official, can’t be good. You rip into it to find out what the official looking letter is all about. Scanning the letter over you see the word “cancellation” a few times underscored and in bold.

As you slowly take your breath and calm from the initial shock you find that the letter basically states that your insurance company is threatening to cancel your policy for some reason. This is actually a warning letter much like that ones that you might receive from your credit card company or even your bank. “If you don’t do (whatever), we are going to cancel your policy.

This is certainly the better of the two notices. Usually it is sent to the policy holder because the policy holder has forgotten to do something. This could be forgetting to agree to their new terms and conditions, not filling out your home address properly or even writing down the wrong phone number. If you comply with what the car insurance company asks then you won’t have any problem. This letter is a small thing and is nothing that you should really worry about.

A “Non-Renewal Notice” on the other hand is something that you should be quite seriously scared of. It has very negative connotations and means exactly what it says. It is a statement from your car insurance company that they are no longer interested in having you as a client. In these letters the company will normally just thank you for your business and leave it at that. They won’t go on to tell you why they have decided to stop insuring your car.

The scary part about Non-Renewal Notices is that if your current insurer decides that you are too much of a risk to insure that other insurance providers will also think twice about having a policy with you. Two things can come of this, you can either find it extremely hard to get car insurance for the next couple of years or your premiums are going to go up significantly as you are placed in the “high risk” category. As you can appreciate, these are both bad things.

Non-Renewal Notices normally come up when you have done something wrong in the previous months before the renewal date of your insurance. These would normally be either getting a DUI, excessive speeding or something that will make the car insurance company sit up and take notice. Sometimes it could simply be that your car insurance agency is moving state or doesn’t want to deal with people who life in your area of the town anymore. Naturally these are less “scary” alternatives that will mean that you will just have to get another insurance company.

With the Non-Renewal notice, the best thing to do is to immediately get quotes from other insurance companies. Find out if you have issues getting a policy or if the quotes that you are receiving is much higher than your previous insurance. This will give you a good idea about what is going on. Calling your current insurer asking why they have decided to not renew your policy will normally fall on deaf ears. If the quotes are still quite competitive then you should just take up the new ones safe in the knowledge that the problem isn’t you. It is your insurance company changing some of its internal policies.

For all intents and purposes, when you get either a Cancellation Notice of a Non-Renewal Notice, you have to act. If not, you will certainly be left uninsured. Cancellation notices aren’t as scary but must also be acted on.