Nonrenewal Notices and How They Work in California

Whether securing coverage for your home, automobile or other needs, purchasing and maintaining sufficient policies is essential. However, achieving this goal may also be complicated and require navigating various pitfalls and hurdles. Sometimes, you may think you’ve retained ideal insurance tailored to your needs, only to be notified that your carrier has opted not to renew your policy. Understanding your rights and how this process can work is critical.

What Is Nonrenewal?

As its name suggests, nonrenewal refers to your insurance company choosing not to continue covering you after your current period expires. For example, if you renew your auto insurance every 12 months, there may come a year when your carrier notifies you that you’ll need to find coverage elsewhere. Carriers may have various reasons for choosing not to renew your policy, such as if you’ve submitted several claims and they now deem you too risky to insure.

How Do Notices Work in California?

In California, insurance companies are typically required to notify you of their intent not to renew your policy at least 75 days before your current coverage period’s conclusion. Nonrenewal notices must include a reason for the carrier’s decision, as well as a phone number for questions and complaints. If a carrier fails to provide notice at least 75 days before a policy expires, coverage must be extended until 75 days after notice is sent. A policy’s terms and conditions cannot be changed during the extension.

What Is the One-year Moratorium?

In recent years, many California homeowners have been protected from cancelation and nonrenewal of their home insurance policies by state law. This legislation prohibits carriers from canceling or not renewing policies covering homes in areas impacted by wildfires or in adjacent ZIP codes. Nonrenewal is not permitted for at least 12 months following the governor declaring a state of emergency.

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Contact Liberty Choice Insurance today to learn more about nonrenewal notices and other insurance-related topics.

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.