Canceled Auto Insurance
Why Companies Cancel a Policy
Technically, in most states your auto insurance company can cancel your policy only if:
- you fail to pay your premium
- you lose your driver's license
- you are guilty of material misrepresentation during the application process--i.e., you fail to notify your insurer of a recorded violation, such as a drunk-driving offense or
- you fail to report a substantial change of risk, such as buying a high-powered sports car to replace a family sedan.
However, your insurer can choose not to renew your auto insurance policy for a variety of reasons.
Do you have a bad driving record?
Have you received a lot of speeding tickets?
Have you ever been caught driving drunk?
Not only are these scenarios considered unsafe and illegal, they are justifiable cause for your insurer to label you a bad risk and refuse to renew your policy. (Some underwriters may feel compelled to cancel policies after only one accident.)
Where do you live?
Has the neighborhood changed in the last few years?
Have the accident or crime rates risen noticeably?
As regions and areas are reassessed periodically, their status could change and you could suddenly find yourself living in a high-risk area, where your insurer's auto insurance rates may not be adequate to cover losses.
How do you keep your insurance company from canceling your auto insurance policy?
That's easy. The most obvious way to maintain your low-risk status is to keep a clean driving record. If you've been in an accident, consider taking a defensive driving course. Even those of us who have been driving for years rarely know the simple tricks to preventing accidents through defensive driving.
Also, look into purchasing special safety and security features for your car, such as anti-lock brakes and an alarm system. Your insurance agent can give you further tips on how to convince your auto insurance company you're a safe driver.