Can an insurance company cancel or non-renew a policy? How does that work?
In most states, insurance companies cannot cancel a policy in mid-term except under circumstances such as non-payment of the premium or fraud by the policyholder. Some states may also permit the insurance company to cancel the policy for other reasons. Non-renewal is another matter. In most states, insurance companies can refuse to renew your coverage for any reason. An insurance company may decide to stop selling a particular line of insurance or policy, or it may change its underwriting criteria, or it may decide that the policyholder’s risk has changed. Regardless, it may decide not to renew your policy as long as you are provided adequate notice. Most states require the insurance company to give you 30 (thirty) to 90 (ninety) days WRITTEN notice. This is intended to give you an opportunity to obtain substitute insurance.
