Insurers may choose to non-renew an auto insurance policy for various reasons, and if you’ve ever been denied a renewal from your auto insurance company, it can be a stressful and confusing ordeal. The most common reasons for an insurer to non-renew a client’s automobile policy may include:
- Non-payment of premium(s)
- Fraudulent claims
- Material Misrepresentation was made on the application
- Suspended or revoked drivers license
- Insured vehicle has become mechanically defective
- Insured vehicle is being used to transport flammable or explosive materials
- Insured has become susceptible to epileptic seizures or heart attacks
- Failure to disclose accidents or violations
Note: The listed above may be grounds for auto policy cancellation, often requiring 30-day advanced notification by the insurer if the auto policy has been in force for more than 60 days
Insurers also commonly use a point system with which they decide if and how many vehicles in a household may be non-renewed. Points are awarded to drivers in incidents of chargeable accidents and violations, and may include but not limited to the following:
- 4 Points: Grand theft auto, DWI, driving without a license, and felony with an automobile
- 2.5 Points: Driving recklessly
- 1.5 Points: Driving carelessly
- 1 Point: Open bottle violation
- .75 Points: More than 1 speeding ticket
- .5 Points: First speeding ticket, accidents under $500, minor moving violations
As in golf, scoring the least amount of points is the name of the game. Get awarded 4 points and you will most likely find yourself losing renewability of 4 or more vehicles in the household. When it comes to auto insurance, a clean point schedule is the key to keeping your policy premiums cheap and maintaining your eligibility for coverage renewability.
