Unfortunately, unexpected things happen in life all the time. That’s why we have insurance. Homeowners, health, car, travel, and even life insurance each serve as a safety net to ease the financial burden when unexpected events happen.
But, what happens when you, or your insurance company, cancels your policy?
Insurance cancellation is defined as the termination of a policy, either by the insurer or the insured, prior to the expiration date of the policy. If the insurer initiates the policy cancellation, they must provide proper notice, giving the policyholder time to dispute the cancellation or find new coverage. Legally, insurance companies must give the policyholder at least 30 days notice prior to termination. Though, depending on the state of coverage, that requirement could be 45 days, 60 days, or even 120 days’ notice.
When an insurance company cancels coverage, there are a few common reasons for doing so.
- Failing to pay your premium.
- Failing to provide accurate information, thus committing fraud.
- Having your driver’s license revoked. (Applicable to auto insurance policies)
When the insured individual cancels a policy, it is usually due to finding a cheaper rate or selling the property that’s insured, such as their home or car. In this case, the policyholder may be entitled to a prorated reimbursement.
Nonrenewals are similar to cancellations. The difference is that a nonrenewal is a policy that is not renewed upon expiration, rather than during the coverage year. Like cancellations, a nonrenewal can be initiated by either party. The policyholder or the insurance company can decide not to renew.
What to do if you receive a cancellation notice?
First, contact your insurance agent. You need to fully understand why you received a cancellation notice and decide your next steps. Do you want to work to reinstate your policy or find a new company and policy altogether?
If your policy is being canceled due to an outstanding balance, you can likely avoid the cancellation by getting up to date on your payments within a certain time frame.
If the cancellation was prompted for another reason, the insurance company may not be willing to reinstate your policy. Therefore, you will need to shop for a new insurer, which may prove to be challenging with a cancellation on your record.
To aid in your search, each state has an insurance department that regulates the industry and serves policyholders. For resources and assistance when shopping for policies, contact your state insurance department.
When it comes to health insurance, open enrollment only falls once a year and is typically during the 4th quarter of the year.
| Plans | Open Enrollment |
| Medicaid | Enroll Anytime |
| Medicare | October 15 - December 7 |
| Federal Marketplace | November 1 - December 15 |
| Employee Sponsored | Varies by Employer |
If you have lost coverage or have a notable life change, you are likely eligible for a special enrollment period outside of the open enrollment periods. To begin looking for new insurance coverage, contact various companies for insurance quotes.
How to Send a Cancellation Notice
If you, the insured, decide to cancel your policy it is recommended that you first check the policy for any cancelation requirements your plan includes. Such as, the information your letter must include, who or which department it should be addressed to, and any time frames to consider.
Regardless of which party initiates the policy cancellation, it is wise to send the letter via Certified Mail®. Certified Mail provides the sender with proof of mailing, proof of delivery, tracking, and even Return Receipt Signatures upon request. All of these assist in proving a notice was not only sent; but, received by the other party.
About Certified Mail Labels
Save $2.75 on each certified letter sent when you mail with Certified Mail Labels. Send USPS Certified Mail® online from the comfort of your home or office. No more waiting in long lines at the Post Office.
No more stickers or forms. Just address, print, and mail! Certified Mail Labels is the fastest and cheapest way to send Certified Mail.
The privacy of your information is important. That’s why, our bank-grade encryption provides safe and secure online storage for organized record-keeping. User account archives include proof of mailing, USPS tracking, Electronic Delivery Confirmation, and Return Receipt Signature for ten years at no additional cost.
Our full-service print and mail option is the perfect solution for insurance companies looking to consolidate the termination notice process. Contact our customer service team to learn more about our full-service solutions.
Learn more about Certified Mail and how Certified Mail Labels works, here.
