Get Kicked Off Auto Insurance: Common Reasons And Solutions

Getting kicked off your auto insurance plan can be stressful and put you at risk. While auto insurance companies cannot drop you without a valid reason, there are several reasons why they may revoke your policy. These include missing payments, filing a fraudulent claim, having your driver's license revoked or suspended, lying on your application, and more. If your auto insurance company drops you, you should contact them to see if they will reinstate your policy. If not, you can try to find a new insurance company or buy car insurance from your state's assigned-risk pool.

Non-renewal and cancellation reasons

There are two primary routes an insurance company will take to discontinue your policy: cancellation and non-renewal. Non-renewal happens when your insurer decides to part ways with you at the end of your policy term. Cancellation is more severe and happens when the insurance company decides to stop coverage before the end of your term.

Non-renewal reasons

• The insurance company decides to no longer offer your particular insurance plan.
• The insurance company decides to sell fewer policies or reduce the number of policyholders in your area.
• The insurance company stops doing business in your area.
• The insurance company phases out a certain kind of coverage.

Cancellation reasons

• Misrepresenting yourself on your application, for example, lying about your address or the number of traffic tickets you've received.
• Having your driver's license revoked or suspended.
• Being convicted of a DUI.
• Making too many claims, especially if they are at-fault claims.
• Not paying your premiums.
• Owning high-performance or altered vehicles.
• Failure to provide documentation.

What to do when your insurance drops your coverage

Being dropped by your insurance company can be a stressful experience, but it's important to act quickly to avoid a lapse in coverage. Here are some steps you can take if your insurance company decides to cancel or not renew your policy:

Understand the reason for the cancellation

Contact your insurance company to understand the reason for the cancellation or non-renewal. Sometimes, insurance policies are cancelled due to administrative errors, in which case you may be able to resolve the issue by providing additional information. It's also important to understand the reason for the cancellation so that you can address any issues and improve your chances of obtaining coverage elsewhere.

Correct any issues with your property

If your insurance was cancelled due to issues with your property, such as disrepair or safety concerns, you may be able to correct these issues and request a reevaluation from the insurance company. Making necessary repairs or upgrades can improve your chances of obtaining coverage from a new insurer.

Speak with an insurance agent

An insurance agent can help you understand your options and guide you in finding the right coverage for your needs. They may also be able to help you find coverage even if you have been dropped by your previous insurance company.

Shop around for a new insurance policy

Start looking for a new insurance policy as soon as possible to avoid a lapse in coverage. Compare quotes and coverage options from multiple insurance providers to find the best option for your needs. Be sure to have your new policy in place before the old policy expires.

Consider a high-risk insurance pool or FAIR plan

If you have difficulty finding coverage due to a history of cancelled policies or other issues, you may be eligible for a high-risk insurance pool or a Fair Access to Insurance Requirements (FAIR) plan. FAIR plans are state-run programs that provide insurance for high-risk consumers, while high-risk insurance pools cater to individuals who cannot obtain coverage in the standard insurance market.

Be honest with your new insurer

When applying for new coverage, be honest about any previous cancellations or issues. Failing to disclose this information could result in a denial of coverage or a claim in the future.

Improve your risk profile

To improve your chances of obtaining coverage and reducing your premiums, consider taking steps to lower your risk profile. This may include improving your credit score, avoiding filing small claims, and maintaining a clean driving record.

Reasons for cancellation

There are several reasons why an insurance company might cancel your auto insurance policy. Here are some common reasons for cancellation:

• Multiple moving violations or at-fault accidents within a certain period, leading to a classification as a high-risk driver.
• Licence or registration suspension, which often occurs due to major traffic violations.
• A DUI (Driving Under the Influence) conviction, which is considered a felony and results in being classified as a high-risk driver.
• Providing fraudulent information, such as lying on an insurance application or filing a fraudulent insurance claim.
• Non-payment of premiums or missed payments.
• Owning high-performance or modified vehicles.
• Failure to provide necessary documentation.

It's important to note that minor infractions, such as forgetting to sign a document, may not always result in immediate cancellation, and insurance companies might be willing to reinstate coverage once the issue is addressed.

Additionally, insurance companies may choose to non-renew a policy rather than cancel it. Non-renewal occurs at the end of a policy term and may be due to reasons unrelated to the driver, such as the company reducing their business in a particular state or discontinuing a specific insurance plan.

Reasons for non-renewal

There are several reasons why your insurance provider may choose not to renew your policy. It's important to note that non-renewal is different from cancellation, as it occurs at the end of a policy term and is often due to company-related issues. Here are some common reasons for non-renewal:

• Company-related decisions: Non-renewal can occur when your insurance provider decides to stop doing business in your area or reduce the number of policies they sell in your region. They may also choose to discontinue a particular insurance plan, which would result in non-renewal if they no longer offer your specific insurance plan.
• Failure to pay premiums: Non-renewal may happen if you fail to make the necessary premium payments as stated in the policy's terms and conditions.
• Frequent claims: If you file too many claims, especially at-fault claims, your insurance company may choose not to renew your policy. They may view you as a higher-risk customer.
• End of the policy term: Non-renewal simply means that your insurance company has decided not to renew your policy when the term is up. They are not obligated to do so and may choose not to continue the relationship for various reasons.

It's important to note that insurance companies are required to notify you in advance of non-renewal and provide the reason for their decision. This gives you time to find alternative insurance coverage and ensure you don't have a lapse in coverage, which can lead to higher premiums in the future.

How to get car insurance after cancellation

Being dropped by your auto insurance company can be a stressful experience, but it's important to act quickly to avoid becoming uninsured, even if only for a short time. Here are the steps to take to get car insurance after your policy has been cancelled.

Understand the Reasons for Cancellation

Before seeking a new insurance provider, it's worth understanding why your previous policy was cancelled. Insurance companies are required to notify you in advance of any cancellation, and the amount of notice you receive may depend on the regulations in your state. Common reasons for cancellation include non-payment of premiums, suspension or revocation of your driver's license, and misrepresentation on your insurance application. Understanding the reason for cancellation can help you avoid the same issues with your new policy.

Contact Your Previous Provider

If you've received a cancellation letter, it's worth contacting your previous insurance provider to see if they're willing to reinstate your coverage. Sometimes, addressing the issue that led to the cancellation, such as making a late payment, can be enough to get your coverage back on track. If your provider is unable or unwilling to reinstate your coverage, you can then ask them for the reason for cancellation, which may be helpful when seeking a new policy.

Shop Around for a New Policy

If you're unable to get your previous policy reinstated, it's time to start looking for a new insurance provider. You may need to turn to a non-standard or high-risk insurance company, especially if your previous policy was cancelled due to issues like a poor driving record or non-payment. These companies specialise in insuring drivers who have been cancelled by standard insurance carriers and may be more willing to offer you coverage. Examples of non-standard insurers include The General and SafeAuto. You can also consider your state's "assigned risk" or "last resort" insurance plan, which is typically available to high-risk drivers who struggle to find coverage in the private market.

Compare Quotes and Choose a New Policy

When shopping for a new policy, it's important to compare quotes from multiple companies to find the best rate. Use online tools and resources to get quotes from both standard and non-standard insurers. Keep in mind that you may face higher rates after a cancellation, especially if the reason for cancellation was related to your driving record or payment history. However, don't let this deter you from shopping around and negotiating the best deal possible.

Avoid Gaps in Coverage

While going through the process of finding a new insurance provider, it's crucial to avoid gaps in your coverage. Driving without insurance is illegal in most states and can lead to penalties such as costly fines or license suspension. Ensure that your new policy is in place before cancelling your previous one, or consider purchasing a temporary non-owners policy to cover any gaps.

Frequently asked questions