In New York, auto insurance companies have specific guidelines they must follow when canceling policies. Generally, an insurer cannot cancel a policy during the policy term unless there is a valid reason permitted by law. Common legal reasons for cancellations may include non-payment of premiums, fraud or material misrepresentation on the application, or the suspension or revocation of the driver’s license of the policyholder or someone insured under the policy.
It’s essential to differentiate between cancellation and non-renewal; cancellation occurs during the policy term, while non-renewal happens at the end of a policy term. In New York, state law dictates that insurers cannot cancel a personal auto policy after 60 days from its effective date except for reasons such as non-payment, fraud, or license issues. Cancellation specifically due to a claim-related loss is generally not permissible under New York regulations, unless fraud or misrepresentation is involved.
However, insurers may choose not to renew a policy if they predict a high risk associated with insuring the individual, possibly due to a history of claims. In such cases, the insurer must provide a valid reason and adequate notice—at least 45 to 60 days before the policy’s expiration—in accordance with New York Insurance Law.
If you believe your insurance policy has been unfairly canceled, you can request clarification from your insurance company or file a complaint with the New York State Department of Financial Services to investigate the situation.
