Beware of Car Insurance Cancellation

Insurance cancellation is a dreaded experience and if you are doing the right things as a driver you won’t get one. Some people do receive the notice that they have been officially dropped by their insurance company and many have to scramble to get additional insurance after a cancellation. Cheap auto insurance rates are usually hard to come by after a cancellation. Knowing the main reasons for auto insurance cancellation can help drivers prevent losing one of the most important privileges available to us all…the ability to drive safely.

There is usually a process for cancellation of car insurance. It usually never happens out of the blue and most people who are cancelled know why. Basically the car insurance company will send the policyholder or driver an official letter via postal mail stating the car insurance policy is subject to cancellation effective a particular date. Insurance companies are legally required to notify an individual of cancellation of a policy in ample enough time for the policyholder to take action in regards to the letter. The letter will also offer an explanation for the cancellation. The cancelled driver has the opportunity to contact their insurance company to resolve the issue if this is possible. Depending on the reason for cancellation a resolution may not be possible and the driver will have to find replacement car insurance before the policy cancellation date. Your insurance company may contact your local Department of Motor Vehicles (DMV) to advise of your insurance cancellation. Failure to obtain insurance can result in additional problems with your state DMV as some states charge uninsured drivers for each day they are uninsured.

There are a couple of reasons for forced car insurance cancellation. One reason is risky driving behavior. If you are convicted of multiple moving violations, involved in repeated accidents or are caught under the influence of drugs or alcohol while driving your policy will be cancelled. Car insurance companies are in the business of taking risks but they will not tolerate a driver placing him or herself, other people and the insurance company at risk because of jeopardous behavior. Insurance fraud is also a reason for insurance cancellation. Some drivers cause accidents repeatedly to collect the monetary benefits for injury and damage. Repeated claims of this sort are an indicator that the driver is not using his or her insurance responsibly and thus the policy is cancelled. A final reason for insurance cancellation is the failure to pay on time. If you don’t pay your insurance timely it will be cancelled. Insurance companies will not provide coverage if the premium is not paid. You can have your insurance reinstated if you are willing to pay any back insurance charges and current charges at once. The ability to do this however is determined by the insurance company.

It is in the best interest of every driver to avoid actions that will cause cancellation of their auto insurance.