There are a few reasons why your car insurance company may decide to drop you from coverage. The most obvious one is that you don’t pay your premium as agreed. Your driving record can also work against you, and if your license is suspended the insurer may decide that you are too risky to continue to cover. Another instance where you may be dropped by your insurance company is if you obtained your policy through fraud or misrepresentation.
During the first 60 days after your car insurance policy is issued, the insurer has the right to cancel your coverage for any reason that it sees fit. They may not even have to provide you with a specific reason for canceling your coverage. After the 60 days are up, the insurance company will likely have to continue to provide coverage for the term of the policy. When the policy is up for renewal, the company may choose not to offer to insure you for another term.
Read on to learn more of the common reasons that auto insurance companies cancel coverage and then to find the very best car insurance just enter your zip above!
Failure to Pay Premiums
Your insurance policy is a contract between you and your insurer. The insurance company agrees to provide coverage for you, so long as you pay your premiums as agreed. If you don’t pay for your coverage, the insurance company can cancel your policy.
Some insurers will allow a customer who has been dropped to pay the amount owing and have the policy reinstated, but the company is not obligated to do so. During the time that the policy lapsed, you will have coverage, so you may want to keep your vehicle parked until you can get the policy back in force.
Driving without insurance, even for a short time, is a criminal offense. If you are in an accident, you will not have the protection your insurance policy carries. Your license and registration may be suspended, even if you are not involved in an accident. In that case, you might end up being dropped by your insurance company anyway.
Poor Record or License Suspension
If you are involved in more than one at-fault accident, your insurance company may decide that you are too risky to cover and drop you from its customer list. In Florida, drivers who have one at-fault accident may be dropped by their insurance company. In other locations in the U.S., the insurance company may not take action unless you were involved in three at-fault accidents.
In a case where your license is suspended, your insurer may consider you are too risky to cover. Your policy may be revoked if someone in your household has his or her license suspended. You may be able to keep your policy in place if you agree that the person whose license is under suspension be removed from your policy.
In some jurisdictions, being charged with a DUI/DWI offense means your license is suspended automatically, and dealing with this issue is separate from the criminal charges. It’s possible to be found not guilty on the charges and still have to wait out the suspension period and a fee to get your license back. This usually required an SR-22 document.
Fraud or Misrepresentation in Car Insurance Cancellation
If the insurance company issues a policy and finds out later that you obtained coverage through fraud or misrepresentation, it will cancel your coverage. Lying about things like how much driving you do or stating that you park your vehicle in a locked garage at night when you leave it on the street instead may lead to you being dropped by your insurer. When you are asked these questions when applying for coverage, be honest.
You don’t know how much weight the insurer will give to a single answer on an application for coverage, but being less than honest may mean that the insurance company will treat your policy as if it had never existed. A better choice is to be honest about everything to do with your record, driving habits, and make and model of your vehicle.
If you are concerned about being dropped by your car insurance company or it has already happened, you need to get covered again quickly. You do have options and it pays to shop around to get the best possible rate, no matter what your personal situation is. You can start to do so by clicking on the free insurance tool on this page to compare pricing from a number of reputable insurance companies. Why don’t you get started right now?