In What Cases a Car Insurance Company Cancel Your Policy?
Car Insurance Company Cancel Your Policy
To say that car insurance is an important tool for a car owner would be an understatement. Apart from being mandatory for drivers, it is extremely helpful in a whole host of situations on the road. The mandatory third-party coverage of car insurance deals with any financial or legal liabilities that arise due to injury or damage to a third-party in an accident. The own damage coverage covers the repair for the damages that your vehicle takes in an accident. Both these benefits and many others like cashless garage facility are offered by a single comprehensive car insurance policy.
Once you have bought a policy and are enjoying all these benefits, receiving a car insurance cancellation notice from your insurance company can be very painful. After all, driving without insurance is illegal. And without coverage, you could be on the hook for accident-related medical bills and vehicle damage. Fortunately, there are some things you can do to help prevent cancellations. And if your policy is terminated, there are ways to get new coverage. But first, you need to know why this cancellation can happen. Doing so may allow you to avoid the situation al together.
Can your policy actually be cancelled by the company?
After you buy car insurance online, your insurance company may cancel your policy, but they must give written notice before doing so. The time they have to give you varies. If you have any doubts about canceling the policy, it is a good idea to contact your insurance provider.
Unlike non-renewal, which occurs only at the end of the policy term, cancellation from the insurance company’s end can occur at any time. Non-renewal of a policy can occur for a number of reasons, including numerous ongoing violations, changes in your credit, and filing too many claims. But car insurance cancellation usually only happens for a few reasons.
Why do companies cancel policies?
Generally, insurance companies can terminate your policy for any reason within the first 60 days after the policy is activated. However, they usually do not terminate the policies for any reason. This is usually because the risk you offer to the insurance company has changed since you applied.
The policy on this can vary across different insurance providers, but if your policy is in effect for more than 60 days, there are usually only a few reasons why the insurance company may terminate your policy in the medium term. They may include:
- You have not paid your premium
Insurance is no different than any other service you pay for. If you do not pay the premium, it will be canceled. Most insurance companies offer a grace period of 30 days – usually after your payment deadline. If you keep your payments up to date, the insurance company will have no reason to cancel your policy.
- You have provided incorrect information
If you are not honest and clear when completing your application or filing a claim, your insurance policy may be cancelled by the insurance company.
- Your driving license has been suspended or revoked.
The appropriate traffic authorities can suspend or revoke licenses for a variety of reasons. Examples are driving under the influence of alcohol or drugs, having unpaid fines, etc. Whether your license is suspended or revoked, your insurance company has the right to cancel your policy.
What to do if your policy is cancelled?
The first thing to do after receiving a car insurance cancellation notice is to contact your insurance company. A car insurance app should be helpful in such a scenario. Depending on the circumstances, they may be willing to reconsider. If they do not, you should immediately start shopping for new coverage.
You can start your search with traditional insurance companies. But if you cannot find coverage, you should contact companies that offer insurance to high-risk drivers. Such insurance companies accept the driver’s application for insurance coverage. You can buy coverage from any company. However, after a cancellation, you are likely to be a charged a higher premium from your new insurance provider.
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