Every car insurance policy has a life span. It's got a birthday (the day you actually buy the policy) and a termination date (usually 6 months to a year after you buy the policy in the first place). Most people let their car insurance policy live out its natural life span, then renew it. Sometimes, however, a policy meets an unnatural and unhealthy end-and it's not always the driver who says it's time to go!
Many drivers are astonished to find out that car insurance companies have the right and the privilege to cancel their car insurance at their discretion. Oh no, they can't be obvious about it (for example, canceling your policy shortly after you call to report a claim but before the inspector gets to the scene) but they do have a very wide criteria that gives them the ability to cut free almost any driver who doesn't meet their criteria.
The most common reason drivers find their car insurance policies canceled is nonpayment of their premium. Hey, times are hard right now. Everyone's struggling to pay their bills, and sometimes one more bill on top of the pile is just a little too much! Insurance companies know that. Unfortunately, they can only afford to give you so much leeway; after all, a company that doesn't bring in premiums isn't going to stay in business very long. You usually have the chance to fall one month behind, then the clock starts ticking down to the cancellation of your policy.
Much like the national court system, car insurance companies require you to tell them the truth, the whole truth and nothing but the truth. They use the facts you give them to determine your car insurance rates. People who lie to get lower insurance rates and get busted by their insurer usually find themselves summarily dropped as a client rather than slapped on the wrist (assuming the omission was intentional-for example, you tell them you didn't use your car for business purposes and you get caught doing exactly that).
Finally, an insurance company can refuse to insure someone who has become too big a risk. When you're playing the car insurance game it's all about making sure your premiums balance out your claims-in other words, you have to make sure you're not paying out more than you're taking in! A driver who suddenly has four or five traffic violations in a very short period of time may find their insurance policy canceled. Car insurance companies want to spread their customer base as far as possible, but they want to stay in business too!
It's very, very rare that a policy would be canceled for a reason other than one of these (although I'm sure it's happened). The good news is, nine times out of ten you can either correct the situation (by bringing your payments up to date, for example) or get another policy somewhere else. Just don't get busted cruising around without any insurance. That's more expensive than anything your car insurance company's going to throw your way.
Many drivers are astonished to find out that car insurance companies have the right and the privilege to cancel their car insurance at their discretion. Oh no, they can't be obvious about it (for example, canceling your policy shortly after you call to report a claim but before the inspector gets to the scene) but they do have a very wide criteria that gives them the ability to cut free almost any driver who doesn't meet their criteria.
The most common reason drivers find their car insurance policies canceled is nonpayment of their premium. Hey, times are hard right now. Everyone's struggling to pay their bills, and sometimes one more bill on top of the pile is just a little too much! Insurance companies know that. Unfortunately, they can only afford to give you so much leeway; after all, a company that doesn't bring in premiums isn't going to stay in business very long. You usually have the chance to fall one month behind, then the clock starts ticking down to the cancellation of your policy.
Much like the national court system, car insurance companies require you to tell them the truth, the whole truth and nothing but the truth. They use the facts you give them to determine your car insurance rates. People who lie to get lower insurance rates and get busted by their insurer usually find themselves summarily dropped as a client rather than slapped on the wrist (assuming the omission was intentional-for example, you tell them you didn't use your car for business purposes and you get caught doing exactly that).
Finally, an insurance company can refuse to insure someone who has become too big a risk. When you're playing the car insurance game it's all about making sure your premiums balance out your claims-in other words, you have to make sure you're not paying out more than you're taking in! A driver who suddenly has four or five traffic violations in a very short period of time may find their insurance policy canceled. Car insurance companies want to spread their customer base as far as possible, but they want to stay in business too!
It's very, very rare that a policy would be canceled for a reason other than one of these (although I'm sure it's happened). The good news is, nine times out of ten you can either correct the situation (by bringing your payments up to date, for example) or get another policy somewhere else. Just don't get busted cruising around without any insurance. That's more expensive than anything your car insurance company's going to throw your way.
