Q: What is the difference between cancellation and non renewal?

A: There is a major difference between cancellation and nonrenewal of a home insurance policy.

Cancellation of a policy occurs when you either

1. Fail to pay your premium -or-
2. Commit fraud or make serious inaccuracies on your application.

Any time your policy is cancelled, you face the risk of being charged a higher rate in the future, even at another insurance company. Nonrenewal of a policy is different than cancelation of a policy in the sense that either you or the insurance company can decide not to renew a policy upon expiration. If the insurance company decides not to renew your policy, they will often give you a certain amount of written notice. Nonrenewal might occur because the company has decided to drop that line of insurance, or because they have decided to write fewer policies in your location. Either way, if your insurance company chooses not to renew your policy, you will not necessarily be charged a higher premium at another company.

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Last Updated: April 16, 2008 10:50 AM EST

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