Most Common Reasons for a Policy to be Canceled or Not Renewed by an Insurance Company

There are a limited number of reasons your car insurance policy will be cancelled or non-renewed. There are actually laws that regulate insurance companies and prevent them from dropping customers on a whim. As long as you avoid filing too many claims and keep a safe driving record, your policy is safe.

If you get too many tickets, the insurance company can choose to cancel your policy or inform you that it will not be renewed when it expires. The reason they can do this is because too many tickets puts you into a higher risk category that many insurance companies will not underwrite insurance policies for.

Accidents work in much the same way as tickets. If you get in one accident, you are probably not going to get cancelled, but if you have several accidents in the space of only a few years, your insurance company may find it difficult to justify continuing your policy. Depending on the company, you may see a dramatic increase in your premiums, get cancelled, or be informed that your policy will not be renewed when it expires.

Paying your premiums on time is important. Prompt payments build a reputation as a person who is financially responsible, and that is what insurance is all about – building financial responsibility. To avoid cancellation for this reason, all you have to do is pay your bill on time, which also avoids unnecessary late fees. Even worse, a person who is habitually late on their insurance payments can be reported to credit agencies and the affects your ability to get loans or qualify for other types of credit.

If you have been notified that your policy is going to be cancelled, don’t wait until the last minute to find a new policy. Use an online insurance quote website to tailor a policy around your needs, and then compare that policy between several different insurance providers to find out who offers the lowest rates. If you wait until the non-renewal or cancellation goes into effect, it could increase your risk assessment and result in insurance premiums that are higher than you want to pay.

Posted in Car Insurance, Insurance.