The Expert Podcast

So, what does nonrenewal mean for an insurance policy? It's not the same as being cancelled. If you have an insurance policy that has a term, let's say a typical homeowners policy might be a one-year term from, you know, May 2023 to May 2024. At the end of that term, you would renew your policy.

It's unlikely your policy will be cancelled during the term unless you do something wrong, such as lying on your application, not paying a premium, or doing something that violates the contract or breaches the terms. They would not cancel you mid-contract; they really can't in most cases. However, at the end of the term, if it expires, it's not considered to be cancelled. If they don't give you another insurance policy, it's considered non-renewed because you would have to renew it anyway, and the rate could be different, with possibly different terms and conditions.

Why would an insurance company not renew you? If you specifically did something during that term, maybe had too many claims, or if your risk went up or you changed your business, they can not renew you. Sometimes an insurance company will non-renew multiple insurance policies in a market because they decide that geographic area is not one they want to be in, that type of risk they don't want to insure, or that type of business they don't cover anymore. They can generally not renew for those reasons.
Typically, in most states, you have to get some kind of notice for non-renewal a month or two in advance, depending on the state and the kind of policy. However, even if you don't get a non-renewal notice, we recommend putting a note on your calendar for all of your important insurance policies, like your homeowners, your business, and your corporate policies. Maybe 90 days before the policy is due, contact your agent or your insurer and ask them for updated quotes for the coming year.

You want to stick with your same insurance company if everything is good; you don't want to be jumping insurance companies left and right. But if you know in advance that the rate is going to go up a lot, or if they might not renew you, or maybe they're going to have different terms, it gives you some time to shop around other companies. If you're going to a new company, they might want more documentation than for renewal. They might want loss runs to show that you had no claims or what claims you did have. They may want UCVs on the executives or financial statements, and if you need to get those in to get a new policy, it may take a month or two to get that work done. So, the earlier you start that, the better.

If you're thinking you might get non-renewed or have been non-renewed, start the process of looking at other coverages as soon as you can to make sure you're not uninsured for some period of time.