Cancellation and Nonrenewal

There is a sizable difference between cancelling your auto policy and not renewing it.

Insurance companies can only cancel a policy that has been effective for more than 60 days except when you fail to pay your premium, commit fraud or misrepresent yourself, or have your driver's license suspended or revoked.

When your policy is not renewed, you or your insurance company chooses not to renew it when it expires. How much time you're given before your policy is dropped depends upon the state's laws and the insurer must explain why they are ending it. If you believe the reason is not fair or need further clarification, you should call your insurance's consumer affairs department. If you're still not satisfied you should call your state insurance department.

In addition, your insurance company may simply choose not to renew certain policies based on your geographic location so it may not even be your fault. Conversely, if you are caught engaging in risky behavior such as drunken or reckless driving, your premium could go up or the policy could be not renewed.

Finally, if your policy is dropped that does not necessarily mean you will be charged a higher premium by another insurance company.