Why Car Insurance May Be Cancelled – Your car insurance could get canceled for a lot of reasons and this is so, according to the laws that govern car insurance in a state. The most common reason why your car insurance may get canceled is if you are late on your insurance payment. Of course, there are other reasons why your insurance company may decide to cancel your insurance policy. Read on to stay informed.
Perhaps you seek answers to why your car insurance may be canceled, stay close to this article. We would enlighten you on reasons why your car insurance could get canceled and how to avoid it.
Why Car Insurance May Be Cancelled
There are several reasons why your insurer may decide to cancel your car insurance. Highlighted below are some of them;
You Were Not Honest In Your Auto Insurance Application
Most auto insurance companies rely on several factors to assign premium rates. Such as your car’s parking address and the number of people who can access your vehicle. So, if your insurer finds out you did not fully disclose the necessary information, your car insurance may be canceled. Not being completely honest with your insurer can be referred to as a “material misrepresentation”, hence, the possibility of your car insurance being cancelled.
Your Driver’s License Was Revoked or Suspended
In a situation where your driver’s license or vehicle registration was revoked or suspended within the policy period, there is every tendency for your car insurance to be canceled. If a driver on your policy gets in a situation that warrants his/her license suspended, your car insurance company may require you to remove the person from your policy. This means that your insurance policy will no longer cover them if they ever get into an accident. If they still end up driving your car, your car insurance can get canceled.
You Made a Fraudulent Claim
If you are caught filing a fraudulent claim, your car insurance can get canceled. However, If you file a claim, you are required to provide detailed and accurate information as regards the incident that led to the claim. If you intentionally fail to provide accurate information, your car insurance company may cancel your policy.
You Were Convicted of DUI or DWI
Supposing you or a driver on your auto insurance policy was convicted of a DUI DWI or OUI, your insurance company automatically considers you as a high-risk driver. In most cases, this can affect your premiums. The average rate will skyrocket once a DUI is 70%. However, instead of increasing your insurance rates outright, your insurance company may decide to send you a cancellation notice. This is to notify you that they intend to cancel your car insurance any time soon.
It is Not Safe to Drive Your Car
Your auto insurance coverage may be canceled if your car has mechanical issues to the extent that it poses a risk to public safety. Additionally, you can be subject to cancellation if your state mandates inspections and you fail to get your car inspected or do not get it inspected.
YouDrive Your Car for Work-Related Purposes
Business use is typically not covered by a personal auto insurance policy. For instance, visiting job sites or making deliveries with your car. You most certainly require a commercial auto policy if you use your vehicle for business purposes in addition to transportation. So, if your insurer finds out you drive your car for business purposes, it could lead to your car insurance getting canceled.
You Drive Passengers for Hire
If your insurer finds out that you drive your car for a ridesharing service like Uber or Lyft without telling them, they may refuse a claim or cancel your car insurance. The only purpose of your auto insurance is to protect you when driving a personal vehicle. Your claim can be rejected if you cause an accident while operating your car for commercial purposes. If you wish to drive passengers for hire, you can check for more information on ridesharing insurance instead.
How to avoid getting your car insurance canceled?
Tell the truth: Before your auto insurance gets to the approval stage, your insurance company will ask you a series of questions as regards your eligibility to buy auto insurance. Ensure you answer all questions truthfully and provide all necessary information that would expedite the process. It is not wise to be dishonest with your insurer. Be in the know that they can check your claim history through the Claims and Underwriting Exchange database. S, if you decide to hide things from them as regards past claims, they’ll most definitely find out.
Keep your insurance company informed
This is also one of the most important ways to avoid getting your car insurance canceled. Perhaps you changed your job, moved to a new house, or changed your vehicle, your insurance company must be aware of these. Also, communicate with your insurer if you start using your vehicle to commute to work, in a case where you don’t normally use your car for that purpose.
Make payments on time
To avoid getting your car insurance canceled, ensure you meet the payment plan specified on your policy. In a case where you miss a car insurance payment g or you are unable to pay the next one, reach out to your insurance company immediately. Let them know the situation at hand. They may be able to offer an online payment that would help recoup the one you missed. Most times, you can negotiate on a new payment plan.
FAQs
What happens if I can’t afford my car insurance payments?
There are times when you might not be financially capable of your car insurance payment; the ideal thing to do is to contact your insurance company as soon as possible. State the reasons why you would not be able to afford your insurance payments. Most insurance companies can offer assistance to avoid cancellation for non-payment on your insurance. The can extend the date of payment to another date aside from the stipulated one. They could also offer other payment plans that would be easier to meet up with.
What happens if my car insurance is canceled?
It is no longer news that driving without insurance, in most states, is considered illegal. In a situation where your car insurance gets canceled, you are expected to notify the state’s Department of Motor Vehicles. They would provide you with information and other alternatives that would be of help to you.
Remember that, driving without standard insurance is illegal and can attract legal penalties, such as payment of fines, and jail term, and in most cases, your driver’s license will be revoked. Also, in the event of an accident and you are without insurance, you will be responsible for any damage incurred to the third party.
Can a canceled car insurance policy be reinstated?
Although it is a rare case, it could be possible to reinstate your insurance policy if it was initially canceled. The exception is for those whose auto insurance got canceled as a result of one missed payment or administrative error. However, in most cases, specifically for those who were not truthful with the information provided or fraud, the policy will most likely not be reinstated.