Grounds
Automatic termination
Nonrenewal
Termination
Notice
occurs at the end of the policy term.
Renewal
occurs when the insurer ends coverage on the policy’s expiration date. Nonrenewal may also refer to the policyholder’s decision to not renew coverage with the insurer.
happens at the end of the policy period when the policyholder does not renew a policy and does not pay the renewal premium when it is due. The Insurance Services Office, Inc. (ISO) personal auto policy (PAP) states that the policy automatically terminates when the named insured obtains other insurance on a covered auto. Then the policy automatically terminates when the other policy becomes effective so that the insured never has more than one policy in effect for the same vehicle.
is the ending of the policy coverage through cancellation, expiration, or nonrenewal. Cancellation occurs when the insurer or the policyholder terminates coverage during the policy year when it would otherwise continue until the policy expires. The party initiating the cancellation must provide the non-canceling party with written notice of its intentions.
occurs when the insurer continues the coverage under an expiring policy for another policy term. The policyholder will pay a premium to renew the policy, which might differ from the premium paid for the expiring policy.
Expiration
is the rationale for an insurer’s decision to cancel or nonrenew a policy.
is a party’s announcement that a policy is being canceled or nonrenewed. When the insurer cancels, a personal auto policy requires that written notice be mailed or delivered to the named insured. When the policyholder cancels, written notice must be given to the insurer.
