Insurance Non-Renewal: Can It Be Fixed, Or Did I Get Shafted?
Not long ago, we published a piece explaining why you were subject to an insurance non-renewal. Now, we address other natural questions which may arise.
When you get that dreaded notice which perhaps you weren’t expecting, you might feel slighted. You’ve been a good insured, you say, and after paying your premiums all these years, this is an injustice. Maybe you also think that it was a mistake, and it’s the insurance company or your agent’s fault. Whatever the case may be, there was a reason for it. An insured may not like the reason, nor may the agent, but there always is one.
The truth is, most everyday people don’t see their non-renewals coming. In my time as an agent speaking to a client about an insurance non-renewal, nobody ever said to me “I understand their reasoning; I expected this to happen” for whatever reason. Many times, it catches insureds off-guard, and may set off a negative reaction. This is understandable, but there may also be something to do about it.
Insurance Non-Renewal: Can It Be Reversed?
If you got non-renewed because of frequency of claims or payment history, there’s probably not much that can be done. An insurance company may say that you have too many claims and they no longer wish to write you. Your “loss ratio” of claims paid versus premium paid might be on the bad side.
Is it fair? I’ve seen situations where a client had one claim and got non-renewed after 20 years without any. (For more on the “am I screwed” question after an accident, we go into that here.) They certainly didn’t think it was fair, and perhaps it wasn’t. When I say it was a big claim, however, it was: over $90,000. Over the prior 20 years, they had paid maybe $70,000 to $80,000 in premium. Twenty years of being a good insured was wiped out with one massive claim.
“Unfair” is a word that could use used, but “unfortunate” is a better one. Had this client had a smaller claim, it could have potentially saved the non-renewal. When you have an at-fault claim that big and you’re paying a relatively small annual premium, however, it’s a tough break.
Insurance companies don’t exist to take it on the chin, so to speak. Like any other for-profit organization, they want to make money. Writing costly insurance risks will hurt the company’s credit and financial ratings.
It’s not unfair if you’ve been dropped because of payment history. Very few insurance companies will tolerate persistent history of late payments.
Insurance Non-Renewal: Turning It Back
As an agent, I did see non-renewals reversed. One scenario: imagine that your General Liability policy is audited annually to confirm your payroll or gross sales. It’s a policy requirement, but you haven’t cooperated in several years. The insurance company decides they don’t wish to renew your policy.
Depending on who your underwriter is, if the insured can complete these audits within a certain frame of time, the carrier may be willing to renew you.
There may also be certain very rare scenarios in which an experienced agent may be able to talk an underwriter out of a non-renewal. Some things to consider: your relationship with the agent, the agent’s relationship with the insurance carrier, and the reasons why you were non-renewed. Don’t bet the ranch on it, however.
Insurance Non-Renewal: Now What?
Now that you’ve been non-renewed, there’s probably a slim chance it can be corrected. Your best option is to find a new carrier. If your agent is involved, they should do it for you as soon as they find out. In the event they can’t find a suitable replacement, they should tell you that, too.
If you were non-renewed for claims, you’d be fortunate to find a new policy at the same premium as before. Companies may see you as more risky, so good for you if you do.