Can a Car Insurer Cancel Your Policy at Any Time?

Perhaps you are in an accident. The damage is significant. And, the resulting auto insurance claim is costly. Could your insurer drop your coverage as a result?

This depends on many factors. Most of the time, insurance companies will not do this. However, the details are in your contract. It includes specific times when your agent may drop your coverage as a result of your actions.

When Can a Carrier Cancel Your Policy?

Once you agree to a car insurance policy and it becomes effective, the insurer cannot cancel it without reason. The allowable reasons are in your policy’s details. Here are a few examples.

Non-payment

You fail to make payment according to the terms of the policy. As a result, your insurer cancels it. The insurance company has the right to cancel after a single missed payment. Be sure you know when your payment due date is.

Try to make payment on time or early. Most insurers offer an option for automatic deductions. That makes it less likely you’ll miss coverage. Making a payment covering six months reduces the risk you will forget, as well.

Drivers License Suspension or Revocation

If the Department of Motor Vehicles suspends or terminates your driver’s license, your insurer may cancel your policy. You have no privilege to drive. Therefore, you do not need coverage. It’s also an indicator that you are an extremely high driving risks. If you need your policy reinstated, you may need to pay a higher premium. This will depend on factors related to the incident and how they impact your driving ability.

Other Causes

Other times when your car insurance cancellation can occur differ from policy to policy. State laws also impact them. If you misrepresent the value of your car or anything about who is driving your car, this may qualify. If you cause intentional damage to the car, this too can create a cancellation for you. This might include intentionally injuring someone or damaging something with your car. Any type of fraud can also be a cause of this.

Keep in mind that after the stated period on your auto insurance policy, your coverage may end. The insurance company has no obligation to extend it. You may need to renew it with a higher premium in cases where incidents or claims are high. Sometimes, car insurance companies will not renew due to numerous points on a license or too many claims. So, as you approach this date, don’t hesitate to speak to your insurer about how to structure your coverage to keep it affordable.

Call us to talk about your Santa Ana auto insurance coverage at (866) 883-9357 today.