Top 5 Reasons Why An Insurer May Cancel Your Car Insurance Policy
You can cancel your car insurance policy at any time for several reasons. Similarly, your auto insurer can also cancel your policy for various reasons. You will receive a written notice, and if you act right and fast, you may be able to turn things around.
Why Cancel?
Laws vary by state, and policies vary among car insurance companies. That said, here are some reasons why your auto insurer may decide to cancel your policy.
1. Non-Payment
Non-payment is the most common reason for car insurance policy cancellation. Most insurers offer a grace period, usually between 10-30 days. So, if you pay up within this grace period, the insurer will keep your car insurance policy active.
You may be able to negotiate a reinstatement and even different payment terms during this grace period. Some carriers may reconsider once you offer an explanation of the extenuating circumstances for non-payment, such as an illness or stay in the hospital.
2. License/Driver Registration Suspension or Revocation
States suspend and revoke licenses as a penalty for various offenses. Following this, your insurance provider may cancel your policy. If a regular driver named under your policy gets their license revoked or suspended, the insurer may require that you initiate the process of excluding the driver from your plan. If you fail to do so, you risk getting your policy canceled.
3. Non-Disclosure and Misrepresentation of Facts
In addition to your personal details, you will be required to share other information when completing your car insurance application and filing a claim. This includes a list of people who regularly drive the insured car and whether you keep the vehicle in a garage or park on the street. Any material misrepresentation in either instance is grounds for cancellation. Giving inaccurate details and leaving out pertinent information constitute this misrepresentation.
4. Too Many At-Fault Accidents and Violations
A car insurance company may cancel your policy if you are involved in too many at-fault accidents or get penalized too many times for moving traffic violations. The insurer will assess the frequency of these violations and accidents and make the decision.
5. Change in Health Status
Some medical conditions can make it unsafe for you to be behind the wheel. In the absence of a physician's certificate in support of your ability to drive safely, the car insurance company can cancel your policy.
Moving Forward
As mentioned, you may be able to work things out even after getting a cancellation notice from your car insurance company. If not, ensure you get started on looking for a new auto insurer.
If you have any questions about insurance cancelations, call an insurance provider, such as Illinois Insurance Center Inc.
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