Understanding Auto Insurance Policy Cancellations

Receiving a notice that your auto insurance policy is being canceled can be alarming, and it’s important to understand what it means and what steps you can take. In Tennessee, insurance companies have specific guidelines they must follow when canceling or nonrenewing an auto policy. Knowing your rights and responsibilities can help you avoid a coverage gap and stay financially protected.

Why Auto Insurance Policies Get Canceled

There are two main types of policy termination: cancellation and nonrenewal. The following describe each:

• Cancellation—This happens during your current policy term and may result from missed payments, providing false information, or having your driver’s license suspended.
• Nonrenewal—This occurs at the end of your policy term. An insurer may choose not to renew for reasons such as too many claims, changes in driving behavior or shifts in underwriting guidelines.

In Tennessee, insurers must typically provide 10 days’ notice for cancellations due to nonpayment and 20 days’ notice for other cancellations. You must receive at least 30 days’ notice if your policy is not being renewed.

Common reasons for cancellation or nonrenewal may include the following:

• Missed premium payments
• High-risk driving behavior
• Fraud or misrepresentation
• License suspension or revocation

If your policy is canceled, it’s critical to act quickly. Driving without insurance in Tennessee is illegal and can result in fines, license suspension and vehicle impoundment.

Stay Covered and Stay Legal

Auto insurance is essential for protecting your finances and complying with Tennessee law. If your policy is at risk of cancellation or you need help finding new coverage, Tennessee State Insurance can help. Contact us today for expert guidance and a fast quote to keep you safe and insured without interruption.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.