Cancellation or Nonrenewal of Your Automobile Insurance Policy

When I have a client involved in an automobile accident who has sustained an injury, I always request a copy of my client’s automobile insurance policy. When the party at fault for the collision is not insured or when the at-fault party does not have adequate insurance to compensate my client, then I look to that portion of my client’s automobile insurance policy which provides coverage to the client for claims involving uninsured or underinsured motorists, typically referred to as UM coverage.

More often than not, my clients are immediately concerned about making a claim against their own policy for two reasons. First, since my client is not at fault, why should they make a claim against their own insurance? Second, clients are concerned that their automobile insurance policy could be canceled or nonrenewed at the end of the policy period. Since this seems to be both a frequent and a legitimate concern, I want to briefly address this issue.

As for the first client concern. If a client has UM coverage under their policy, they have, obviously, selected and paid premiums for a specific type of coverage – coverage which protects them against uninsured and underinsured drivers. Since a client has chosen to have this coverage, for the very purpose of protecting them against uninsured and underinsured drivers, it makes little or no sense not to make a UM claim. The coverage has been purchased, so clients should take advantage of what they have been paying for. This being said, there are circumstances, situations and conditions under which an individual may wish to forgo a UM claim, and they will be addressed in future editions of Luke Law, LLC’s blogs. In the meantime, if you have concerns, please call T. Hailey Hatcher to discuss them.

With respect to the second concern voiced by clients, cancellation and nonrenewal, the Florida Statutes have much to say on the matter. In Florida, our legislature has created laws which govern when insurance companies can and cannot cancel or renew policies. For example, Fla. Stat. § 626.9702says that no insurer can impose or request an additional premium for automobile insurance, or refuse to renew a policy, simply because the insured has been convicted of one or more traffic violations which do not involve an accident or do not cause driving privileges to be revoked or suspended unless the insurer can provide adequate proof of a direct, demonstrable, objective relationship between the violation and an increased risk for highway accidents. In addition, this statute says that no insurer is allowed to cancel or terminate a contract for insurance after an insured has paid the premiums for 5 years or more because of a single traffic accident.

Other provisions of the Florida Statutes also apply to the cancellation and nonrenewal of insurance policies. Fla. Stat. § 627.728 contains very specific mandates for an insurance company when notifying an insured about policy cancellation. This section also says that no insurer shall fail to renew a policy for reasons based entirely on sex, occupation, marital status, residence, military service or age of an insured, on the principal place of garaging an insured vehicle or any combination therof. Further, the statute provides that no insurer shall fail to renew a policy for reasons based on the race, color, creed or national origin of the insured. Finally, and perhaps most importantly, this section says that an insurance company cannot fail to renew a policy for any reason which is arbitrary or capricious. Brief research into the case law reveals that the point of contention is often determining what constitutes arbitrary and capricious.

The final section that I would like to address is Fla. Stat. § 626.9541, which is entitled Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Defined. Since the text of this statute is quite lengthy, and addresses numerous matters including false advertising by insurance companies, unfair claim settlement practices, specification of insurance costs, as well as cancellation and nonrenewal, I will be discussing these additional provisions in upcoming blogs. Please return soon to follow up for more information.

In the meantime, if you feel as though your policy has been wrongfully canceled or non-renewed, or if you have foregone making a UM claim for fear of having your policy canceled or nonrenewed, please contact T. Hailey Hatcher at Luke Law, LLC for a consultation regarding your insurance issues.

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