Your business insurance was non-renewed. Now what?

What this means for you

• Read the date before you read the reason. Your policy runs to the expiration date on the letter and stops there. In California, Texas and New York the carrier owes you at least 60 days, and a notice that arrives later than that extends the policy by law, in California and Texas for 60 days after the notice and in New York for 60 days or, if the notice came after expiration, a whole further term. Count the days from the postmark. If the count is short, say so to the carrier in writing and keep the envelope.
• The reason tells you where to shop. The statutes above require one, and the reason sorts non-renewals into two kinds. "Loss history" or "claims" is about you, and the cure is a submission that explains what happened and what changed. "No longer writing this class", "exceeds our size guidelines" or "outside our appetite for buildings of this age" is about the carrier, and no version of your application changes it. Every standard carrier tends to move the same way at the same time, which is why the dealer in the case below spent weeks hearing no from brokers who all had the same markets.
• A non-renewal is not a mark against you in the way a cancellation is. New applications ask whether you have been cancelled or non-renewed, and the honest answer with the carrier’s stated reason attached is ordinary. What a new carrier reads is your loss runs, the claim-by-claim history your old carrier produces on request. Order them the day the letter comes, because a submission without them waits, and you do not have time to wait.
• Do not let it lapse to save a week. A gap between the old expiration and the new effective date is the one outcome worse than a bad price. A lender can buy force-placed insurance in your name, a general contractor can hold a certificate and the crew with it, and a state agency can pull the tags or the license the policy was a condition of. If a replacement is not bound the day before expiration, ask the old carrier for a short extension in writing. Some will, and the statutes above make it automatic when the notice was late.
• Go to a broker who has somewhere else to go. A business the standard market has stopped writing is placed in the specialty and surplus lines market, through wholesalers most agencies have no access to. Ask any broker you call one question before you send a single document. Which markets, other than the ones that just declined me, will you approach? A list is an answer. "We will shop it" is not.

Related questions

Can an insurance company just drop you?

At the end of the term, yes, for almost any reason it states, as long as it gives the notice the state requires. Mid-term is different. A carrier that wants out before expiration has to cancel, and cancellation in the middle of a policy is restricted to a short list of grounds in most states, such as non-payment, fraud on the application or a large change in the risk. The letter in your hand will say which one it is. If it says "nonrenewal" you are covered to the expiration date. If it says "cancellation" with a date before expiration, call your broker today, because the clock is shorter and the grounds can be challenged.

What is the difference between a non-renewal, a cancellation and a lapse?

A non-renewal is the carrier telling you it will not offer another term. Your current policy runs to its expiration date, and California’s code defines it as "a notice by the insurer to the named insured that the insurer is unwilling to renew a policy." A cancellation ends coverage during the term, "termination of coverage by an insurer (other than termination at the request of the insured) during a policy period", and carries a shorter notice period and stricter grounds. A lapse is neither. It is what happens when a policy expires or is cancelled and nothing replaces it, so there is a day, or a month, with no coverage at all. The non-renewal and the cancellation are the carrier’s decisions. The lapse is the one that becomes yours.

Why does my lender or general contractor care so much about a gap?

Because their protection runs through your policy, and a gap is a period where a loss lands on them. A lender named on a building policy has a loan secured by a building that, for the gap, is uninsured, which is why loan documents require continuous coverage and let the lender buy force-placed insurance in your name at its own price if it thinks you have none. A general contractor holds a certificate from every subcontractor because the owner holds one from the general, and a sub with no policy on site is the general’s claim. Both read the effective date on the new certificate against the expiration date on the old one, and a day between them is what they are looking for.

My fleet was non-renewed because we grew too fast. Is that even a reason?

It is a common one. An electrical contractor in California that installs large-scale charging station hubs was non-renewed on its commercial auto because the business had grown too fast for the carrier, and came to us 24 hours before the policy lapsed. California commercial auto is a hard market on a good day, and a fleet that has outgrown its file is exactly what the standard carriers decline. We had the fleet covered the next business day. No lapse, no trucks parked, and no time lost at the job site while a general contractor waited on a certificate. Rapid growth reads as risk to the carrier that wrote the small version of the business. To a market that writes the size you are now, it is just the application.

Electrical contractor insurance

Every broker I call says nobody is writing my type of business. Is that true?

It is true of the brokers you have called. A used car dealer in Pennsylvania lost his garage liability when his carrier changed its appetite and stopped writing independent dealers. Without the policy he could not keep his dealer tags, and he had spent weeks calling local brokers who came back with nothing. We placed the garage liability, he kept his tags, and the price came in below what he had been paying the admitted carriers. When a whole class falls out of appetite, the brokers who only have admitted markets are all calling the same closed doors. The dealers who get placed are the ones whose broker has somewhere else to go.

Auto dealer insurance

My building was non-renewed because of its age and zip code. What do I do about the lender?

Solve the date first and tell the lender yourself. The owner of an eight-unit apartment building in California was down to the wire. His carrier had tightened its appetite to exclude buildings from the 1970s and older in his zip code, and his was one of them. The renewal was not coming, the lender required continuous coverage, and the deadline was days away. We placed the building on short notice and reported the new policy to his lender ourselves, so he was never hit with force-placed insurance, the expensive policy a lender buys in your name when it thinks you have none. Appetite changes by age and zip code are routine in California property right now, and they arrive as a non-renewal notice with a date on it. The date is the problem to solve first, and the lender is the second reader of every certificate.

Apartment building insurance

The letter offers to renew, but with a higher deductible and a lower limit. Is that a non-renewal?

The statutes treat it as one. California requires the same 60 to 120 day notice when a carrier means "to condition renewal upon reduction of limits, elimination of coverages, increase in deductibles, or increase of more than 25 percent in the rate". New York’s list is "change of limits, change in type of coverage, reduction of coverage, increased deductible or addition of exclusion", or a premium increase over ten percent, and the notice must state the amount. A conditional renewal is the carrier telling you it would rather not keep you at the old terms, and it deserves the same shopping a flat refusal does. Sometimes the conditional offer is the best deal available. You only know that after somebody has looked.

The notice came late. Do I get more time?

In the three states quoted here, yes, and by statute rather than by asking. California continues the policy "with no change in its terms or conditions, for a period of 60 days after the insurer gives the notice." Texas keeps coverage in effect "until the 61st day after the date on which the notice is delivered or mailed", with the premium for the extra days charged pro rata at the previous year’s rate. New York keeps the expiring terms for sixty days after a late notice, and for a whole further term when the notice arrives on or after expiration. Other states have their own rules, and a broker licensed in yours can read them for you. In every state, keep the envelope, because the postmark is the evidence.

What should I have ready before I call?

The non-renewal letter, so we can read the reason and the date. Your current policy, including the declarations pages. Loss runs for the last five years from every carrier you have had, ordered today if you do not have them. And a plain account of what changed, because a business that grew, moved, added trucks or took on a new kind of work is a different risk from the one the old carrier wrote, and the new one prices what you tell it.