In order to avoid a loss, an insurance company may cancel your policy if they find your situation to be too risky for their standards. Unfortunately, a cancelled insurance policy may leave you financially vulnerable in the case that you have to pay out of pocket for car accident expenses and can lead to fines or a suspended license if you’re caught driving uninsured. There are a few common reasons, insurance companies cancel policies, and it’s important to be aware of them so you can best avoid a cancellation.
Falling behind on your payments will quickly lead to your policy being cancelled. Before it gets to this point, your insurer will likely make several attempts to reach out to you and make sure you are aware of your missing payments, deadlines, and chance of cancellation. If you are missing these warnings, make sure your insurance company has the correct phone number and email address associated with your name.
Too Many Claims
If an insurance company cancels your policy for too many claims, you will need a strong argument to support that something has changed to make you “less risky.” This could be things like a change in job, lifestyle, personal situation, or home repair. You can also assess your claims to determine if they were all related, occurred near the same time, or what they were worth if it will aide in your case.
If an insurance company finds out that you’ve been deceiving them or lying to them for financial gain, they will likely cancel your driver’s policy and may even file criminal charges.
Change in Situation
If you were diagnosed with a medical condition that makes it unsafe for you to drive, have your license revoked or suspended, or convicted of criminal charges, your insurance may cancel your policy on the basis that your driving may be impaired or risky.
For most cases, as long as you make frequent payments and drive carefully, you shouldn’t need to worry too much about your policy being cancelled. However, it is important to understand why it happens and that if your policy is cancelled, to start shopping for a new policy right away.
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AZ Insurance Team
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*