Home Auto Financing Reasons a Car Insurance Company May Cancel Your Policy

Reasons a Car Insurance Company May Cancel Your Policy

Having car insurance is mandatory unless you are in New Hampshire. New Hampshire also requires you to have car insurance unless you have proof that you have sufficient financial assets to pay for any accidents caused by you. But there are multiple reasons for your car insurance company to drop your coverage and make it illegal for you to drive. Here are some of the reasons.

Failing to pay premiums: This is one of the most glaring reasons for your insurance company to cancel your policy. However, the company will try to contact you multiple times before they drop off your insurance. To avoid failing to pay for your premiums, you can sign up for autopay options that are offered by the insurance companies themselves.

Health reasons: If you have any condition(s) which impair you from driving a car, then your insurance can be canceled. Your driving license can also be revoked due to this. You may need to present a doctor’s certificate to ensure you can drive safely. If you already have a condition before purchasing the insurance, then you may want to be honest with them beforehand as it may lead to the cancelation of your policy in the future.

Rash driving: Your car insurance will also get canceled if your driving license has been revoked. Getting a ticket for breaking the road rules can also reflect badly on your car insurance policy. In some states, your car insurance can also get canceled if you have an accident record or a conviction (including criminal convictions as well). This makes you a potential threat to the public when you are driving.

Filing an extensive amount of claim: If you file an extensive claim amount, then your car insurance company may establish that you represent too much risk for them as a driver and they will surely want to cancel your insurance. Some insurers might not cancel your policy, but they will not renew your coverage and if that happens, you’re still covered through the end of your current term. But you need to start looking for a substitute policy so that you can stay covered when your current policy term ends.

Fraud or misconduct: Fraud sounds like something you would never commit. But it covers a lot of things you didn’t think we’re a big deal. It covers things like lying about an accident or saying you didn’t have any prior violations on your application even though you were at fault in an accident(s) in the previous year.

It also covers things that you might have considered to be insignificant such as lying about the number of miles you drive each year or even forgetting to include a high-risk driver on your policy. Apart from the fact that it can get your policy canceled, it can cost you in fines or possible jail time. You can avoid this by filling out your application properly and updating your car insurance company any time there is a change in your circumstances.