One of the most costly and difficult things to overcome is having your insurance policy cancelled. A cancelled policy is never a positive mark on someones insurance credit score history. Cancellation usually means the insured policy holder has caused the insurance company a reason to deny accepting the risk any longer.
The most common reason for an insurance company to cancel an Auto Insurance Policy include:
It all starts with the original Application a person submits when asking for insurance coverage from an insurer. The insurance company has the right to cancel a new insurance policy any time and for any reason during the “binding period.” This is generally from the time the contract is signed and the insurance premium is paid usually 60 days, the insurer can cancel a policy. When a policy is cancelled during the binding period, it’s usually because the insurance company has found a problem with a driving record, insurance credit score which has made the customer an unacceptable risk.
These things include a misrepresentation of material facts about the risk your are as an insured including:
- The actual driving history,
- Past claims history,
- The names and information of people living in the household with access to your vehicle.
At Any time an insurance company can cancel an auto insurance policy if the company decided a “cancellable offense,” has been committed. It depends on your state laws but in most cases an insured would be given a written notice of the cancellation. Most companies will give between 10 and 30 days’ notice before a policy is cancelled. The notice of cancellation should tell the policy holder why the insurance company has decided to cancel the auto insurance policy.
Some of the common cancellable offenses include a member of the insured household loses driving privileges during the policy period because of License:
- Suspension,
- Revocation, or
- Expiration
The number one and most avoidable reason an insurance policy may be cancelled is failure to pay the renewal or monthly premiums. Many insurance companies will allow a reinstatement of the policy if it’s cancelled for non-payment. Generally more then one such cancellation will result in the company not offering a renewal of the same insurance product or type.
Related Blogs:
- The Contents of An Auto Insurance Policy.
- Are You A High Risk to Your Auto Insurance Company?
- No Car? Do You Still Need Auto Insurance?
- Your Credit Score and How It Relates To Insurance.
Glossary of Insurance Terms:
A | B | C | D | E | F | G | H | I | J-K | L | M | N | O | P | Q-R | S | T | U-V | W-Z
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