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If your insurance company doesn't want to insure you anymore, there are two different ways they can go about extricating themselves from you. Cancellation is the more extreme of the two. There are only a few circumstances in which an insurer is allowed to cancel your policy before it is up for renewal. These include a late payment, a loss of your license (like from a DUI or other offense), or a determination that you provided inaccurate personal information when the policy was created. In the first few months of a policy, though, insurance companies are allowed to cancel for any reason.

Because cancellation is a black smudge on your insurance record, it's important to do everything you can to avoid it. Making payments on time is crucial, as is avoiding driving under the influence and being as forthright as possible when providing information to prospective insurers. It might be tempting to lie about recent traffic offenses or tickets, but in the long run, this is an injurious decision for the health of your credit.

Non-renewal is a different story, and not near as damning. When your auto insurance policy has run its course, your insurer may decide that they no longer want to insure you. Generally, an insurer will issue a non-renewal notice if you have filed multiple claims in a short period of time. Perhaps your credit rating has tanked and your current insurer sees you as a liability. There is also the possibility that the company is restructuring or pulling out of a certain area and is discontinuing your policy through no fault of your own. While you are still left searching for new policy, it's not near as difficult to bounce back from a non-renewal as it is a cancellation.