A few weeks ago I received a cancellation notice effective two weeks from then for my home insurance because of a single occurrence of a lack of funds. I immediately paid the balance due and had the insurance company confirm that coverage would continue without interruption.

I am now in the process of shopping home insurance for a property I am buying and one of the questions asked by all is if my insurance policy was ever cancelled in the past 5 years. I answered "No" as technically I have never stopped being covered by my insurer and they agreed to keep the policy active. Did I answer correctly ?

  • You could also post this to Legal.SE as the wording could come into play.
    – Michael
    Commented Jul 19, 2017 at 17:27
  • It's a little unclear... Did you have your policy reinstated before there was ever a break in coverage?
    – quid
    Commented Jul 19, 2017 at 17:59
  • 1
    @quid that is correct. I received a notification by mail that cancellation would occur two weeks from then. No break in coverage occurred.
    – ApplePie
    Commented Jul 19, 2017 at 18:01
  • Did the cancellation notice ever become effective? Commented Jul 20, 2017 at 1:30

2 Answers 2


If you never had a break in coverage, then you can answer "No" honestly. Your insurance was not cancelled.

The reason that this question is asked is this: If you did have a lapse in coverage, and a problem arose during the time you were not covered, you might be trying to obtain a new insurance policy and then immediately make a claim on the situation that occurred while you were not covered. If you have been continuously covered for the last 5 years and continue to be covered now, it negates that possibility.

  • 1
    Well, maybe. I used to work as a data scientist at a major insurance company. Almost certainly the true reason the OP was asked is that a statistical model for claims and losses was used to price the insurance product, and having a lapse in coverage as a predictor in the model was validated to give an increase in the model's predictive power. The causal reason for this is a secondary concern, though useful for "does this make sense" validation. Commented Jul 20, 2017 at 1:20
  • @MatthewDrury this, there are multiple reasons an insirance policy might be cancelled by an insurer, and most if not all of them would be red flags for other companies as well.
    – JAD
    Commented Jul 20, 2017 at 13:20
  • 1
    Yup, I agree, and that's also what the data says. The ultimate justification for that for any insurance company is in a statistical model, not in storytelling. Commented Jul 20, 2017 at 13:28
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    @MatthewDrury Sorry if this is chatty and tangential but isn't the statistical model the basis for storytelling? I mean will insurance companies follow results out of the statistical model without understanding the mechanism of what could lead to those results? For example if they find that people with prime numbered addresses are more likely to commit fraud in a statistically significant number of cases would they act on it without the story of why that is?
    – Myles
    Commented Jul 20, 2017 at 15:52
  • It depends on the application. For customer facing models that need to be regulatory blessed, storytelling is a part of convincing regulators and business type people. As a data person, it's always a little uncomfortable, because you can't really validate causal stories without random trials, which are illegal (in the US). Also, I would not trust something as prone to error as statistical significance, people doing it correctly use lots of bootstrapping, cross validation, regularization to make their statistical modeling decisions. So in the end, you can only prove that something is... Commented Jul 20, 2017 at 16:35

Take a closer look at that question you are being asked. Usually (all cases that I can ever remember seeing), what you are being asked is "was your insurance policy ever cancelled in the past 5 years for any reason other than non payment of premium?".

If the new insurance company does not qualify this question with something like: "... for any reason other than non payment of premium", then ask them if non-payment of premium would constitute cancellation. I would be surprised if it did.

It happens frequently enough, that when someone changes insurance companies, or moves to a new apartment/house, they forget to officially "cancel" the existing insurance coverage... they just stop making payments. They will usually have to "officially" cancel the policy later, but in many cases the policy may lapse due to non-payment of premium in the meantime.

The new insurance company is usually not really so worried about cancellation due to non-payment of premium. They are trying to find out if there was a more serious reason for the cancellation, such as fraud, or violation of terms.

The issue of "continuous coverage" is a another matter and you will usually be asked about this separately. After all, you can voluntarily terminate your insurance coverage at any time and create a break in coverage without having your coverage cancelled by your carrier, so to say your coverage has never been cancelled does not mean you never had a break in coverage. The new insurance company will usually want to ask you about both of these things.

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