If you have ever received a letter from your insurance company stating that they will not renew your coverage, you probably assumed that your coverage had been cancelled. However, this is not the case. Non-renewal and cancellation are actually two very different things, and understanding the differences between them is important.

Non-Renewal

Usually, the term for a property insurance policy is one year. Once that year expires, your insurance company can decide not to renew coverage, as can you. Should the former occur, there are laws in place to govern insurance companies. Under Florida statute, your insurance company must give you advance notice of 45 days should they decide not to renew your coverage.  Non-renewal of your policy means that your coverage will remain until your contract with your insurance company expires.

Cancellation

When a cancellation of coverage occurs, coverage ends prior to the expiration date of the policy. By law, insurance companies can only cancel a policy if the policy holder’s risk changed substantially, they didn’t pay their premiums, or they made false statements in the application. A company can also cancel coverage if they decide to no longer offer a particular line of insurance products. Cancellations only require ten days advance written notice to the policy holder.

What to Do If You Don’t Agree With a Non-Renewal

In addition to providing you with advance notice of a non-renewal, your insurance company must also provide you with a reason for the non-renewal. If you don’t agree with that reason or need more details about it, calling your insurance provider may get you a better explanation. However, it can sometimes cause more questions to be raised. Should this occur, the Florida Division of Consumer Services can help with further clarification.

Insurers Can Terminate Within the First 90 Days

According to Florida statute, every insurer has the right to cancel or not renew a policy within the first ninety days of coverage. This affords them the same opportunity the consumer has, which is to reverse a purchase decision following a change of mind. Although this doesn’t occur often, there have been instances where consumers with policies under a private insurer discovered they were not locked in for one year.

The truth is that, should an insurance policy be less than 90 days old and the insurance company wish to cancel coverage, they can do so. But they must give written notice at least twenty days before that cancellation occurs, as well as a reason for the cancellation.

Beware the Caveats of Cancellation

Should your policy get cancelled by your insurance company, it could become much more difficult to locate coverage from another company. This is because of the serious circumstances which govern cancellation. If coverage from another provider is obtained following cancellation, it could mean that much higher premiums will have to be paid.

Are you looking at coverage following a cancellation or non-renewal? Call us at 877-869-8989 to get the information you need.