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What is the Difference Between Cancellation and Non-Renewal of An Auto Policy?

What is the Difference Between Cancellation and Non-Renewal of An Auto Policy?

Auto insurance can be a confusing, complicated enough thing on a good day. The many policies (and their hidden exceptions from coverage), the baffling billing plans, it can all be quite a headache, sure enough. But, once you’ve chosen your provider, your policy, and gotten things into full swing, one would think that the confusion is over, and barring unfortunate incidents where claims have to be made, it should all be smooth sailing henceforth, shouldn’t it?

In a perfect world, this would certainly be the case. However, few long-time drivers are unfamiliar with confusing notices that say things like “cancellation notice” versus “non-renewal notice”. Clearly, in either case, you’re staring down the barrel of an absence of legally-required insurance, and action needs to be taken to remedy this for your sake.

But, what’s the difference between these two? It sounds like they’d mean the same thing, but in all reality, they’re distinctly different and have significantly different connotations. One is quite harsh, while the other is just an artifact how this kind of industry has to work and isn’t personal.

Which is which, and what’re the primary causes of either? What’re the long-term ramifications of them? Today, we’re going to take a look at both, what they mean, what brings each one about, and what effects they can have on the long term.

Understanding the causes and ramifications of these is very important, as one of them can have quite severe consequences for the future.


Let’s get the nastier one out of the way first. Cancellations are quite harsh and can have severe consequences. Cancellations are usually the result of non-payment of plans and premiums, but can also be brought about by ongoing poor driving records (accidents, tickets, more severe crimes such as DUI arrests), which make you too high of a risk for their set tolerances.

When a cancellation occurs, you have a somewhat short window to find a replacement policy with another provider, as it generally takes effect within about fifteen business days, sometimes less in certain states. The consequences long term apply largely to your credit score.

It can make it harder to find affordable policies moving forward, as these insurance providers do exchange customer histories when it’s a matter of public record (non-payments and traffic law violations falling well within this domain).


Non-renewals are far less severe and are seldom something personal. These are simply an executive decision by way of your provider to no longer accept your business. These tend to happen when policies are restructured, or you cease to qualify for policies or plans within their purview. This often happens based on your income bracket changing, your age range changing, your vehicle type changing, and other such events.

These usually provide you significant time to find a replacement provider/policy, and also have no effect on your credit score or customer history. They’re an inconvenience, and an unfortunate aspect of these sorts of service industries, but not something with lasting implications.

To learn more about cancellations, non-renewals, and other similar concepts, fill out our contact form below, or call us today!

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