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Here's what you need to know...
  • Car insurance companies can drop for you for different reasons
  • DUI’s, traffic violations, and high-risk behavior can create this situation
  • Failure to pay premiums is cause for non-renewal or cancellation

Sometimes things are beyond our control. Decisions are made by companies sometimes that affect our lives in a big way, even if we do not feel it was justified.

You may be hit by a driver. You may have a medical emergency, which causes you to make several late payments. Or you may have a new teenage driver who has a lead foot and several tickets to show for it.

Many of these unexpected scenarios could cause your insurance company to cancel your policy.

Start comparison shopping now to make sure you have the right coverage at the right price. Enter your zip code in our FREE tool to get started!

Reasons Your Car Insurance Company Might Drop You

AdobeStock_3404582-1600x1600Why might your car insurance company drop you from your coverage? Here are a few reasons this could happen.

Keep in mind that this list is not exclusive, but these are the most common reasons this might happen.

– Failed to pay your premium

Sometimes we get swamped with bills that we can’t pay or get behind on other responsibilities. Sometimes it’s just an oversight on our part.

Whatever the reason, if you fail to pay your insurance premium, the company will drop you from your coverage.

They are required to warn you about this before they do it.

If you receive an email or letter stating that your coverage is about to be dropped, you can quickly get reinstated to avoid having the policy canceled.

– Collected too many points on your driving record

Insurance companies base your insurance premiums on the number of points that you accrue on your driving record. These points come from your driving behaviors and include many factors.

– Failed to provide adequate information on your application or false information

Providing false information on an insurance application is a felony and is considered insurance fraud.

You should always be honest when you fill out insurance forms, but you are only held responsible for what you know to be true.

You will not be held liable for statements that you did not understand. But insurance companies can still drop you if the information you provided is incomplete, inaccurate, or false.

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Other Reasons for Cancelation

Below are some other reasons your car insurance company might drop your coverage.

For this reason, it is important to always drive responsibly, so that you will avoid some of the situations that can create this problem with your auto insurance.

  • Reckless driving
  • DUI’s
  • Moving traffic violations

This list is not exclusive, but it covers a majority of reasons as to why your insurance company might drop you.

What to Do When Your Car Insurance Provider Drops Your Coverage

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When your car insurance provider drops your coverage, they are required to send you an explanation before terminating your coverage.

By law, they are required to give you a 30-day notice before ending your policy so that you have a chance to find replacement coverage in time.

You can find more consumer information at the above link to learn more about your rights as an insurance consumer.

What do I do next?

When your insurance company drops you, you have a few options. First, you can appeal the decision to the insurance company and try to rectify the problem that caused them to drop you from your policy.

For example, if the reason was due to incomplete information or unpaid premiums, you can often repair this situation by simply paying any back premiums due and paying the first premium in advance.

If the company requires more information or the information you initially provided was inaccurate, simply tell them that you made a mistake and gave them the new information they need.

As long as they believe you are honest, they will likely reinstate you.

If you are starting over with a new company, it is relatively easy to implement a new policy right away. Simply compare and shop the various options and contact the provider of your choice to get a free quote.

You can join an indemnity company. If the decision to drop you was due to recent traffic accidents, DUI’s, or reckless driving, it may be a bit harder to get reinstated.

Some insurance companies simply do not want to take the risk of a high-risk driver. However, you can ask any provider you talk to about joining their indemnity company.

Indemnity Company Options

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Most major car insurance providers have an alternate company that they pull funds from to cover high-risk drivers. You may be considered high risk if you:

Again, this list is not exclusive, but it covers many situations where you might be considered high-risk.

So, if you fit into any or all of these categories and that is the reason your previous company dropped you, you could ask if you qualify for the indemnity version.

Keep in mind these policies tend to have different stipulations or maximum benefits and higher in premiums than the basic insurance policies, so read the fine print.

But this cost is understandable because the higher the risk to the insurance company, the more you must pay in premiums.

When shopping for auto insurance, compare and check the finer points of the policies as you shop and ask questions to determine what your coverage entails.

With a little time and research effort on your part, you will be able to replace your current insurance if your provider is threatening to drop you.

Make sure though that you get another car insurance policy in place before the previous provider drops you so that there are no gaps in coverage.

Browse the insurance companies and see which ones fit your needs then contact an agent to learn more about what you can do to protect yourself and your car when your insurance provider gives you a cancellation notice.

Remember, it’s not worth the risk to drive without insurance.

Make sure you have the right coverage at the right costs. Enter your zip code into our FREE comparison tool to get started!

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