What\'s the Difference between Cancellation and Non-Renewal?

What\'s the Difference between Cancellation and Non-Renewal? Related Information:

When you take out any insurance policy, not just a homeowner’s policy, there is a difference between the cancellation of your policy and non-renewal. There are two ways your policy can be cancelled – by you and by the insurance company. If during the term of the policy, you realize that you no longer need the policy, you can cancel the policy by informing the insurance company of your decision. Whether or not you receive a refund depends on any conditions that may be included in the policy, but generally if you have paid the policy in full in advance, you will receive the unused portion of the premium.

If you fail to make the monthly premiums as specified under the terms of the insurance policy, the company will cancel the policy. This has the same effect as if you had other debts that you did not pay because it will affect your credit rating. If the insurance company cancels your policy, it leaves you without insurance, leaving you without any insurance. It can also make it difficult for another insurance company to accept you as a client and sell you a home insurance policy. It is possible that if you missed payments on the premiums, the company will reinsure you, but it will probably be at a higher rate, because you are risk for making the required payments.

The company can also cancel the policy if you did not provide accurate information when you purchased the policy. This misinformation could include a past history of insurance claims, having insurance cancelled or if you rent the home instead of living there yourself. Having an insurance policy on a property you rent increases the cost of the policy because of the increased risk of damage and therefore a claim.

Non-renewal can also take the same forms as cancellation. Many homeowners look for cheaper premiums from insurance company for the same level of coverage. When your policy expires, you can choose to take out a policy from a different company and decide not to renew your old policy. If this is the case, simply ignoring the renewal statement is not enough. In order for the renewal not to be automatic, you should contact the insurance company and inform them of your decision not to renew.

The company can also decide not to renew your policy. This is not as damaging as the cancellation of the policy would be. It does not take effect until your policy has expired. The company can make the decision that they no longer want to have you as a client and refuse to renew your policy for various reasons. It could be because of misrepresentation of information or it could be because of a high number of claims during the term of the policy, which is usually a year.

When the company decides to either cancel or not renew your policy, they are required to notify you of the decision in writing. If you do not receive a notification that the company will not renew your policy prior to the renewal date, they cannot do so after you have made the premium payment to renew the policy. The company does not have to give you a reason for their decision, but you can request an explanation by contacting the company in writing.

A decision of non-renewal of a policy does not necessarily mean that you have done something wrong. It may simply mean the company is changing its focus and is concentrating on other forms of insurance or it could mean the company is moving out of the area.