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Texas insurance glossary

Cancellation

A cancellation is the termination of a policy during its term, by the insurer or by the policyholder, rather than at the end of the term.

Sources checked

Texas Insurance Code § 551.104 sets out when an insurer may cancel a personal auto policy — among the grounds, that the policy has been in effect fewer than 60 days, and that the license or vehicle registration of the named insured or another operator in the household has been suspended or revoked.

That second ground is why a suspension can cost a driver the policy as well as the license, and why a filing requirement and a placement problem so often arrive in the same week.

Cancellation, non-renewal and declination are three different events with three different remedies. The letter says which one happened.

Sources: Tex. Ins. Code ch. 551 — declination, cancellation and nonrenewal; HB 2067 (89R) — written reason for a declination, cancellation or nonrenewal. Verified .

A definition, not legal advice and not a quote. Rules and figures change; confirm your own situation against the source named above, or with us, before you act on it. Last checked .

See also

  • Non-renewal A non-renewal is the insurer declining to continue a policy at the end of its term, as distinct from a mid-term cancellation or a declination that never issued at all.
  • Lapse A lapse is any period with no auto policy in force, whether the policy was cancelled, not renewed, or simply never paid.
  • SR-26 An SR-26 is the notice a carrier files with the Department of Public Safety when a certified SR-22 policy is cancelled, terminated or allowed to lapse.
  • Non-standard auto Non-standard auto is the market segment for drivers the preferred market declines or prices badly, after tickets, at-fault crashes, a lapse, or no prior insurance.

Where this is handled

Knowing what a coverage is called is not the same as knowing what is on your policy. One independent agency can read your declarations page with you and compare the markets that will write your record.

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