Insurance Coverage Cancellation Versus Non-renewal
Insurance Coverage Cancellation Versus Non-renewal; Receiving a letter from the insurance company concerning the status of your policy can be confusing if you are unfamiliar with the language. It is important that you understand the difference between the cancellation of your insurance coverage policy and a nonrenewal. These terms are vastly different and require different responses on your part and that of your broker.
Insurance Coverage Non-renewal
A policy nonrenewal occurs after the insurance company decides, or after you decide, not to renew your Insurance Coverage policy when it expires. If your Insurance Coverage company decides not to renew, adequate notice must be given and their notice must outline the reasons why they have chosen not to renew your policy for another year.
Here are some reasons why your policy may not be renewed:
- The insurer does not carry that particular line of coverage any longer.
- The insurer has decided to write fewer policies under that specific line of coverage in your area.
- Your company’s risk profile and or operations have changed significantly and your insurer is no longer comfortable insuring your organization.
Insurance Coverage Cancellation
The cancellation of an insurance policy is different, as are the laws that govern it. Be aware that provided sufficient notice has been provided your insurance company can cancel your policy at any time, but below are the 3 main reasons insurers will cancel coverage:
- You did not pay your premium.
- You have committed fraud.
- You have made serious misrepresentations about your company on the Application.
If your insurance coverage is cancelled by your insurer it can be difficult to obtain a new policy, as other companies may see you as a less favourable risk. If you receive a cancellation notice because you failed to pay your premium, you may be able to resurrect your policy with the insurer by paying for an entire year’s worth of premiums upfront. If that is not an option for you, then you may have to work with a new insurer.
|ALIGNED Across Canada
100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.