Illinois Insurance Facts If Your Automobile Insurance Policy Is Nonrenewed Revised July 2003

If your automobile insurance company terminates your policy without your permission, your company has certain duties and you have certain rights. A company may terminate a policy without your permission in three ways:

1. rescission - when the company voids your policy back to the beginning. There is no coverage at all and the company will return the money you paid;

 
2. cancellation - when the company terminates your policy before the expiration date; and

 
3. nonrenewal - when the company terminates your policy at the expiration date.

A company's duties and your rights differ depending on whether your policy is rescinded, canceled or nonrenewed. This fact sheet explains what happens when your policy is being nonrenewed at its expiration date.

Reason for Nonrenewal

A company may nonrenew your automobile policy for any reason except your age, gender, race, color, creed, ancestry, occupation, marital status, employer of the insured, or physical handicap (as defined in the law).

A company is prohibited from nonrenewing your automobile policy based solely on credit report information. If credit information from your credit report is used to nonrenew your insurance policy, the insurer must provide you with the name of the national credit bureau that supplied the information so that you can get a free copy of your credit report. For more information about credit scoring, see our fact sheet entitled Understanding How Insurers Use Credit Information.

Effective January 1, 2003, an insurer is prohibited from nonrenewing your automobile policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report.

Notice

The company must send you a written notice explaining why it is nonrenewing your policy. The notice must also explain two important items:

1. You have the right to appeal the nonrenewal as explained below under Hearing Rights.

 
2. You may be eligible to buy insurance from the Illinois Automobile Insurance Plan if you cannot find coverage elsewhere.

Note: If your insurer merges or restructures with another company, or if your insurer reclassifies your policy (possibly due to an excess of claims), the company must mail you a notice about the change 60 days prior to a change in your policy.

Mailing Time

The company must mail a nonrenewal notice to you at your last known mailing address, so it is important for you to notify your insurance agent or company if you move. The company must mail your nonrenewal notice:

• at least 30 days before the nonrenewal date if the policy has been in force five years or less; or

 
• at least 60 days before the nonrenewal date if your policy has been in force more than five continuous years.

The company must keep proof that it mailed your notice, but it does not have to show proof that you received it.

Hearing Rights

If you believe your company failed to follow the required steps when nonrenewing your policy, you may appeal the nonrenewal to the Director of Insurance. To do so, you must mail or deliver your written request for a hearing to the Division of Insurance at least 20 days before the nonrenewal date, explaining in detail why you believe the company has improperly nonrenewed your policy.

If your hearing is granted, we will send you written notice about the time and date of the hearing.

For More Information

Related Topics

If Your Automobile Insurance Policy Is Canceled
If You Can't Find Auto Insurance
If Your Homeowners Insurance Policy Is Canceled
If Your Homeowners Insurance Policy Is Nonrenewed
Understanding How Insurers Use Credit Information