Which of the following best describes a 'non-renewal' in insurance?

A 'non-renewal' in insurance occurs when the insurance company decides not to renew the policy at the end of its term. This means that the insurer has chosen to not extend the coverage for another period, which can happen for various reasons, such as changes in risk, claims history, or company underwriting guidelines.

This definition is critical because it highlights the role of the insurance company in the renewal process, emphasizing that it is not the insured who makes this decision but rather the insurer. Understanding this distinction is vital for policyholders to navigate their insurance agreements effectively and to comprehend their options at the end of a policy period.

The other options reflect different scenarios that do not relate to the notion of a non-renewal. For instance, automatic renewal refers to the practice where a policy is extended without the need for action from the policyholder. Cancellation by the insured indicates the decision of the policyholder to end their coverage before the term is up. Selling a policy to another party involves a transfer of ownership, not a renewal decision. Each of these choices represents different aspects of the insurance process and highlights the specific nature of what constitutes a non-renewal.