What happens if a policy is nonrenewed?

When a policy is nonrenewed, it means that the insurer has decided not to renew the policy upon its expiration. This action leads to the cancellation of the policy at the end of its term. Nonrenewal typically occurs when the insurer identifies risks or conditions that warrant not continuing the coverage, such as changes in the insured’s risk profile or compliance issues.

In the context of this scenario, once the policy’s expiration date arrives, there will be no coverage in place, and the insured will have to seek new coverage options if needed. This situation contrasts with automatic renewal, where the policy would continue under the same terms unless either party opts to make changes or cancel.

Additionally, nonrenewal does not imply that the insured has the right to file a claim during the time after the policy has been nonrenewed but before its expiration. Moreover, a refund of premium is typically associated with the cancellation of a policy before its term ends, rather than nonrenewal, as nonrenewal simply means that coverage will not continue beyond the current term.