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After a recent accident claim was resolved, we received a nonrenewal notice from our insurance company. In the letter it says that our insurer will decline to renew our automobile insurance at the end of the term because:

You've had 4 or more claims [...] within the previous 36 months

In researching this, I have discovered that it is typical for companies to not renew a policy if you are "high risk" driver (which we are not, I reviewed all the criteria and we meet none of them) or if you have 3 at-fault accidents in the past 3 years. Two of our claims were "comprehensive" (although one of them was "glass" replacement only), and one of the accidents was not at fault, meaning that we did not reach this threshold.

I called the insurer's underwriting department and they did not give me any additional info. I suspect (but cannot prove) that it may be related to the size of the last claim, which wound up being about twice the original estimate, at the body shop "provided" by the insurance company itself. (i.e. I just went with a shop pre-approved and "recommended" by them.) This was the only substantial claim, the others were all in the low four figures or less. I should also note that all the "accidents" were single car, with the last one being a large unseen rock on an unpaved road which bumped the underside of the vehicle, causing a surprisingly large amount of damage which was not immediately obvious. From my research on this it is exceedingly difficult to go after anyone in such a case even if it wasn't the driver's fault that an unpaved road held such a disguised and difficult to see obstacle when there were no other witnesses. And when you hit what seems like a hard bump and everything seems fine for the next 50 miles it is rather hard to go back and even identify where the accident took place.

On the notice it says that I have the right to ask my state's department of insurance to review the non-renewal which I must do within 10 days "of receipt" of the non-renewal notice. However, when I go to their web site it tells a different story. According to it, an insurer can issue a non renewal for practically any reason except my location or membership in a protected class, and I can only submit a complaint if I believe they violated the law. Even then, I have to submit written documentation detailing correspondence and show them how the reason they gave me was "wrong" - whatever that means, but the way it is worded makes it sound like it has to be that the reason they give is incorrect.

I have been with my current insurance company for close to 20 years, at almost 10 years on the current policy with only bad luck on claims in the last 3 years. I really have no desire to use any other company as they have always exceeded my expectations of customer service, and if you look at the total amount I have paid in premiums over those 20 years versus what they have paid out, they are not really behind. I get my insurance directly, i.e. not through an agent and am concerned about no longer being able to get insurance that will fit into my budget as a result of not being able to stay with them. I have on a few occasions shopped around and have found other companies to be at least 20% higher, and when I tried shopping with my current home insurance agent to see if I could bundle to get a lower rate they weren't able to get close to my rate.

I am at a bit of a loss as to how I can appeal this given the contradictory statements from the insurance company itself (which suggests I can) and the state (which suggests I cannot), or how I should really proceed in order to protect my personal finances.

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    I have always assumed insurance companies could terminate the policy for any reason (just like most states allow employers to terminate employees for any reason) that doesn't violate the law (e.g., discrimination). It would usually state something to that effect if you read all the fine print. Anyway, if you have had 4 claims of any size in 36 months, it sounds like you have finally crossed their threshold. I recently had my best credit card (30+ years) closed for no good reason and they wouldn't reconsider. You can escalate your plea to management but be prepared to find someone else. – topshot Aug 14 at 12:50
  • if you look at the total amount I have paid in premiums over those 20 years versus what they have paid out, they are not really behind. But, unfortunately, this is not how insurance works. Insurance is pooled risk, and for automobile insurance specifically it's always term insurance. Every 6- or 12-month renewal is a separate term, for the duration of which the underwriters estimate that you (and all others in similar pool) will be subject to losses that, on average, will not exceed the premiums paid in (again, during that term only). – David Z Aug 14 at 16:53
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I am at a bit of a loss as to how I can appeal this given the contradictory statements from the insurance company itself (which suggests I can) and the state (which suggests I cannot), or how I should really proceed in order to protect my personal finances.

The language about asking your state to review the non-renewal sounds typical, they aren't suggesting that in your circumstance there is good reason to request a review, just that you have the option of having it reviewed. It sounds like in your state the reasons to have it reviewed don't really apply to your situation.

It doesn't hurt to talk to them and see if something was mis-classified that could result in a change of their decision, or try to plead your case as a long-time loyal customer. Otherwise, it sounds like they were legally justified in dropping you as a customer, you most likely just have to move on and find a new insurance company.

It's an odd spot to be in, but some claims aren't worth filing due to risk of being dropped by the insurer. This is a factor a lot of people don't consider, if a claim would be just a bit over the deductible it can be sometimes be wise to eat the extra cost out of pocket rather than filing a claim. Sometimes the claims are all reasonable and worth filing but you'll get dropped anyway.

  • Yeah I get the part about not filing some claims... and I did forgo filing any claims for when over time all four corners of my vehicle got scraped backing in and out due to the vehicle only having about 8 inches of clearance on either side of the garage door. Still, you get insurance to cover cases when you can't financially bear the risk, and our deductibles are set accordingly. Last sentence noted... – Michael Aug 14 at 2:34
  • I don't suppose it would be worth calling back and trying to argue the "haven't had 3 at faults" would it? I initially called them after I received an e-mail but nothing in the mail because I had no idea what it was talking about, but it sounded really scary! – Michael Aug 14 at 2:35
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    @Michael It can't hurt to talk to them and see if something was mis-classified that could result in a change of their decision, or try to plead your case as a long-time loyal customer. – Hart CO Aug 14 at 3:12
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On the notice it says that I have the right to ask my state's department of insurance to review the non-renewal which I must do within 10 days "of receipt" of the non-renewal notice. However, when I go to their web site it tells a different story. According to it, an insurer can issue a non renewal for practically any reason except my location or membership in a protected class, and I can only submit a complaint if I believe they violated the law.

That is the notice that the state insurance regulation requires them to include with every non-renewal notice. It doesn't imply that the insurance company thinks your appeal will win, or that it will lose. It just means the state requires them to tell you that you can appeal, and that there is a deadline.

I am at a bit of a loss as to how I can appeal this given the contradictory statements from the insurance company itself (which suggests I can) and the state (which suggests I cannot), or how I should really proceed in order to protect my personal finances.

There is no conflict. They followed the law telling you about the appeals process. The state describes the steps required, and the basis for your appeal to be granted.

Appealing doesn't cost you anything. Pull the documentation you have. Be specific with dates, types of claims and amounts. If the stated reason is x accidents in y months and you don't meet it, say so.

In many states there is a state sponsored program for drivers who can't get insurance because of their driving record and their claims history. The non-renewal notice, or the state website should have information on a plan if your state has one.

The following is an observation.

You've had 4 or more claims [...] within the previous 36 months

That is exactly what you describe. You have had multiple claims. The question is does the stated reason meet your state regulations, and does it accurately describe your situation.

  • And yes, they can decide to stop doing business with anyone for almost any reason. – xyious Aug 14 at 16:19

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