If your policy has ever been canceled for non-payment, then you most likely have completed and signed a No-Loss letter in order to reinstate your policy.
Simply put, a no-loss letter is a statement, signed by you, stating that there have been no known losses or claims from the time your policy canceled until the current date.
Why does the insurance company request this?
You have asked the insurance company to reinstate your policy (rather than rewriting a new application, with a new policy effective date). A condition of reinstatement is that you have no losses or claims during the time that you were uninsured. The insurance company would not want to reinstate your policy if there were a claim they had to cover during the uninsured period.
An important word of caution! Insurance companies are not obligated to or may not choose to reinstate your policy. There may be a number of reasons for this, but the most obvious is that you've had too many cancellation warnings in the past. Therefore, you should never allow your policy to cancel with the assumption that it can be reinstated.
Here is a sample No-Loss Letter:
This letter confirms that there have been no losses whatsoever from (the date of cancellation) until (the date you sign the statement) that may result in any claim of any kind against its subsidiaries or related companies.
I understand that the reinstatement of my insurance is conditioned upon this statement and any misstatements make the reinstatement null and void.
Signed on this date, shown below:
If you have any additional questions about No-Loss Letters, contact us in the office at any time.