What type of insurance requires the insurer to justify the refusal to renew coverage?

Guaranteed renewable insurance is designed to provide the policyholder with the right to continue coverage beyond the initial term without the insurer being able to cancel it, provided that the premium is paid. If the insurer decides not to renew the policy, they must justify their decision, ensuring that the policyholder is protected against arbitrary cancellation. This requirement enhances consumer protection by ensuring that individuals have some security and stability in maintaining their insurance coverage, especially in times of increased health or financial risks.

This stance is in stark contrast to nonrenewable policies, which do not obligate the insurer to justify expiration, as well as conditionally renewable and optionally renewable policies, which may impose specific conditions under which renewal can be denied. In those cases, the insurer can decline renewal based on certain criteria without needing to provide justification as strict as what is required with guaranteed renewable policies.