What Should I Do When My Auto Insurance Policy Gets Cancelled?

What Should I Do When My Auto Insurance Policy Gets Cancelled?

Having car insurance isn’t just a necessity; it’s the law. While you may do your best to maintain your payments and follow all your policy requirements, there still may be instances that would cause an insurance company to cancel your policy. Insurance companies deal with risk on a daily basis. They choose how much risk they are willing to assume. However, the risk isn’t the only reason a policy may be canceled.

Can a Car Insurance Company Drop You as a Client?

Aside from becoming a high-risk driver with too many tickets/accidents, there are a few other reasons your carrier may choose to cancel your auto insurance coverage. The most common reason is the non-payment of your premiums. Another common reason is that your driver’s license has been put in jeopardy, either through being revoked or suspended. Your policy may also be canceled if your agent finds out that you were not completely honest when you applied for your policy. When you are informed of the cancellation, the first thing you should do is contact your agent to find out why.

What Can I Do After My Car Insurance Is Cancelled?

When you first learn about the cancellation, your first question should be, “How much time do I have left?” Once you find out why your policy has been canceled, ask if there is a possibility that you can possibly change their decision. Maybe you can write them a letter explaining your situation and asking them to reinstate your policy. If there is nothing you can do to persuade them, you need to start looking elsewhere. Remember that it may take a little while to find a policy that meets your needs, so don’t waste a lot of time. Start looking as soon as possible.

Cancellation Vs. Non-Renewal

Insurance policies are basically short-term contracts that run from six months to a year, after which both parties have the option of renewing the policy. A non-renewal is simply the option not to renew the policy for another term. A cancellation, on the other hand, means canceling the policy prior to its renewal date.

The state in which you live will determine how much notice you will receive before a carrier can stop providing coverage. If you receive a non-renewal letter, then your policy will end on the day your policy is supposed to expire. Non-renewals are often the result of too many infractions or claims or simply because the type of coverage you have is no longer being offered.

Is It Harder to Get a New Insurance If Your Policy Is Cancelled?

Being dropped by your carrier for any reason will have an impact on your ability to get a new auto insurance policy. This is especially true if you have high-risk incidents (e.g., DUIs, tickets/infractions) or claims on your policy. Having high-risk items on your record may turn many carriers away almost immediately. If they do offer you coverage, then it will be at an exorbitant price. Many states offer an “assigned risk” program for drivers who are considered to be “high risk” and can’t find affordable coverage elsewhere.

If your auto insurance gets canceled, it isn’t the end of the world, but it can be extremely frustrating. When you need answers, your first call should be to an agency that you trust. At 01 Insurance, our experts have the answers you need. We can guide you through the process of getting your new insurance policy in place before your old coverage runs out. Schedule an appointment today to find out what your next steps should be.