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Implications of obtaining a non-renewal notice



When you receive a non-renewal notice, this means that your insurance company will not provide you cover after the policy term has ended. It also means that you need to find another assurance company to offer you cover.

The National Motor Vehicle Theft Reduction Council reported a 6% rise of car thefts in the 2016-2017 financial year (https://carsafe.com.au/assets/NMVTRC_Theft_Watch_Issue_63.pdf). In terms of such an occurrence, vehicle insurance is useful in covering a massive financial loss when your car is stolen or even written off. However, if your insurance company sends you a non-renewal notice this could imply that you may be without insurance cover.

Reasons for a non-renewal notice

There are various reasons for receiving a non-renewal notice. These fall into two categories, namely, mistakes you have made, or difficulties with the insurance company.
If the fault lies with you, your driving record, and possibly numerous fines and tickets gleaned, have come under scrutiny. Speeding alone is responsible for 1in 5 accidents, 40% of these accidents proving fatal (https://www.finance.gov.au/vehicle-leasing-and-fleet-management/vehicle-and-driver-safety.html#AccidentStatistics). By accumulating many fines, you have become a high risk to the insurer.

However, it is not simply your bad driving that could have resulted in non-renewal. It may also be about the number of claims made, and whether these were seen as questionable. Normally, insurance companies will tolerate a maximum of three at-fault claims over a three-year period, before cutting you off. Then again, insurers could simply decline your claim: in 2014-2015, 26% car claims were declined (https://assets.kpmg.com/content/dam/kpmg/au/pdf/2016/general-insurance-industry-review-2016.pdf).

Another reason could be that your payments have regularly been either late or declined owing to insufficient funds. On the other hand, the insurer may stop offering a certain cover, or the company may be downsizing, resulting to end the policy without renewing it.

What can you do?


When you receive a non-renewal notice, the reason for the insurance company deciding to drop you will be spelled out. If not, you need to ask why. Either way, you should contact your insurance company, as they may have made a mistake. However, if there is no mistake, and they will not cover you further, you will need to find another insurance company to cover you.  Ideally, let the transfer to the new company occur a day before or on the same day as your policy ends with your current insurance company.  Either way, between the transition to another insurance company, you will still be covered by your Compulsory Third Party Insurance. This insurance is required by law in all Australian states when you register your vehicle. However, in NSW the requirement is already to have a policy in place when registering the vehicle.
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