What might a policyholder expect if their policy is canceled due to non-payment?

When a policyholder's insurance policy is canceled due to non-payment, one potential consequence is a decreased ability to obtain future insurance. This can happen because insurers view the non-payment of premiums as a sign of increased risk or unreliability. A history of non-payment might result in insurers perceiving the individual as a higher-risk customer, which could lead to them being denied coverage or being offered policies with higher premiums or fewer benefits. Insurers often analyze an applicant's past insurance behavior as part of the underwriting process, and a cancellation for non-payment can negatively impact that evaluation.

The other options suggest more favorable outcomes, such as the ability to reapply immediately, receiving refunds, or even increasing coverage limits; however, these are generally not associated with the negative ramifications of a policy cancellation due to non-payment. In many cases, the insurance market may penalize individuals for such cancellations, thus affecting their future insurance opportunities negatively.