Getting a cancellation of your car insurance from your insurer can be nerve-wracking. After all, in most states it is illegal to drive without insurance. And without insurance, you could be liable for accident-related medical bills and vehicle damage.

Fortunately, there are a few things you can do to prevent cancellation. And if your policy is canceled, there are ways to get new coverage.

Can you really cancel my policy without asking?

Your insurance company can terminate your policy, but must terminate it in writing beforehand. The time they have to give you varies by state. If you have any questions about policy cancellations, it’s a good idea to contact your state’s insurance department.

In contrast to a non-renewal, which only takes place at the end of the contract period, it can be canceled at any time. Non-renewals can happen for many reasons, including too many moving violations, changing your credit, and having too many claims. However, car insurance can usually only be canceled for a few reasons.

Why do companies cancel policies?

In general, insurance companies can terminate your contract during the first 60 days of the contract’s validity without giving a reason. However, they typically don’t cancel policies for no reason. This is usually because the risk you are presenting to the insurer has changed since you applied.

Common reasons why policies are canceled

Laws vary by state, but if your policy has been in effect for more than 60 days there are usually few reasons why an insurer can terminate your policy in the medium term. They can include:

  • You haven’t paid your bill. Insurance is no different from any other service you pay for. If you don’t pay your bill, it will be canceled. Most insurance companies offer a grace period – usually 30 days – after the due date of the payment. If you update your payments during the grace period, the insurance company will usually keep your policy active.
  • You lied. This also includes lies of omission. If you do not complete your application (completely) truthfully or make a claim, your insurance can be canceled.
  • Your license has been suspended or revoked. States can suspend and revoke licenses for a number of reasons. Examples of this are driving under the influence of alcohol or drugs, having too many points and unpaid parking tickets. If the state suspends or revokes your license, your insurer usually has the right to terminate your policy.
  • Your health has changed. If you have been diagnosed with an illness that makes driving unsafe, the insurer may be able to terminate your policy.

What to do if your policy is canceled

After receiving a confirmation of termination from the motor insurance company, you must first contact your insurance company. Depending on the circumstances, you may be willing to reconsider. If it doesn’t, you should start looking for a new cover right away.

You can start your search with traditional insurers. However, if you can’t find insurance coverage, you may need to turn to companies that specialize in insuring high risk drivers. And if you still can’t get insurance, you may need to review your state’s assigned risk insurance pool. Insurers participating in these pools must accept drivers assigned by the state, no matter how high the risk.

Regardless of where you take out insurance, you don’t want to let your policy expire as you could face financial loss in the event of an accident. It also sets off a chain reaction of events that can include:

  • Fines if you get caught driving without insurance
  • Higher premiums when you get cover again
  • suspension Your vehicle registration
  • Take back your car when you lease it or have a car loan

How to be reinstated

If your insurance company cancels your policy for non-payment, you may be able to get them to reinstate it. It is usually easier to get the policy back in effect if you are within the grace period and it has not expired. When your policy has expired, things get harder. However, the rules for reinstatement vary by insurer, so it may be worth calling your insurance company.

If you received a cancellation of your car insurance because you did not pay the premium, contact your insurer immediately. You may be ready to resume your policy by the time you pay your debt plus any accrued interest and fees.

If the insurance company agrees to reinstate your policy, you may need to sign a form stating that you have not suffered any losses during the grace period. And you agree not to make any claims from incidents that have occurred during this time with the insurance company. Having your policy reinstated by the insurance company is usually the best option as you maintain ongoing coverage rather than looking for a new policy. Nevertheless, your insurer can increase your tariffs.

This will prevent your policy from being canceled

There are things you can do to prevent auto insurance cancellation.

  • Pay on time. If you know you cannot make your payment, contact your insurance company right away. They may be ready to work with you to come up with a payment plan so that you can keep your coverage active.
  • Say the truth. Do not try to hide things from the insurance company in order to get a lower rate or to create the appearance that you were not to blame for a claim.
  • Follow the rules. Do not give your state a reason to suspend or revoke your license. Reckless driving and driving under the influence of drugs or alcohol are not the only violations that can lead to your license being withdrawn. Your state can also suspend or revoke your license if you fail to appear in court, pay fines, leave the scene of the accident, and more.

If you have received a cancellation of your motor insurance from your insurer, check whether you can have your existing policy resumed. If not, you need to find new insurance cover quickly so that your policy does not expire.

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