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Non-renewal or cancellation of insurance, what is the difference?

What is the difference between non-renewal and cancellation of an insurance policy?

Insurance Policy Cancellation: An insurance company can cancel your policy if, after the policy has been in force for 60 days, you fail to pay the premium or have commited fraud on your original insurance application. The law, and your insurance contract, states that your insurance company cannot cancel your policy (except at renewal) for any other reason.

Insurance Non-Renewal: A company can non-renew your policy on the anniversary date of the policy. If you get a non-renewal notice, it doesn't necessarily mean you have done something wrong.

An insurance company might be trying to reduce their exposure in a certain part of the country or no longer wants to sell a certain type of insurance coverage. Exiting a certain insurance class happens more frequently with business insurance than with personal insurance. A company may have terrible exposure for certain types of business and might not have a sufficient spread of the risk. In these cases, they might decide to exit that class of business.

There are also cases where companies decide to exit a geographic region due to losses and/or their ability to compete in a particular state. This is most common in states where there are catastrophic exposures. Some examples of those are earthquakes, hurricanes, tornadoes and wildfires.

Whatever the reason, you can get further explanation from your state insurance department.