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tacit renewal

Tacit renewal is an arrangement in which a contract of insurance "renews" automatically without either insured or insurer having an obligation to act.

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This renewal happens at a predetermined date, calculated by deducting the "notice period" (most often expressed in a number of days) from the anniversary date of the contract. These "notice periods" can also vary by both country jurisdiction and coverage line of business. For example, in Germany, a 93-day notice period is required; for Canada, that notice period is only 15 days and only for automobile lines of coverage. The obligation to notify the current insurer that coverage is not being renewed has some complexities as well. In some countries, the local client (not the corporate home office) is required to notify the insurance company of intent not to renew.