These Five Mistakes Could
Cost You Your Car Insurance.
Once you have your car insured, it’s natural
to assume you’re in the driver’s seat, ready to cruise through renewal
automatically every year.
In fact, you’re probably more concerned
about shopping for lower premiums than losing coverage.
But it’s important to remember that, like the signs you
sometimes see in shops and bars, insurance companies also ”reserve the
right to refuse service to anyone.”
Your insurance company can dump you on any anniversary,
and in some cases, between them. If it’s on an anniversary, it’s
non-renewal.
If it’s any other time, it’s cancellation.
Non-renewal can be for any number of reasons, from your
driving record to simply choosing to stop issuing policies in
your area.
Depending on the state, they may not have
to offer a reason at all. But they do have to give notice:
typically 10 to 30 days.
Cancellation, on the other hand, is more serious, because
it’s more likely to affect your ability to get insurance elsewhere, especially
at a decent price.
If your policy is cancelled, most state laws require a
specific reason and adequate notice: as with non-renewal, typically 10 to 30
days.
How to
get your insurance cancelled:
While the specific reasons allowing insurance companies
to cancel vary by state, the following infractions could transform you
overnight from someone complaining about the cost of coverage into one
longing for a premium to pay.
1.
Lie
It doesn’t take a rocket scientist to know the more you
drive, the more you pay. So when the agent asks about your daily commute,
you fudge a little – who’s going to know?
Lies like this can be a relationship-ender. “Forget” to
tell the company about your teenaged son who borrows the car, tickets you’ve
gotten, or anything else that materially impacts the risk a company assumes and
you could be cancelled.
2.
Get tickets:
It probably comes as no surprise that if you rack up tickets
for speeding, running red lights, or other infractions, your insurance
company won’t be overjoyed having you as a customer.
While bad behavior is more commonly a cause of non-renewal
than cancellation, some states may allow it.
3.
Cause accidents:
Most insurance companies won’t drop you after one
accident, whether it’s your fault or not. Some may not even raise your rates.
But repeat offenders will almost certainly pay more and ultimately
have trouble maintaining coverage.
While it’s not fair, you may also look riskier to a company
following accidents that aren’t your fault. This won’t likely be a source of
cancellation, but perhaps non-renewal.
4.
Drive drunk
While your car insurance policy may not be immediately
cancelled after one drunk driving conviction, you can bet it either won’t
be renewed or the renewal will be at a much higher price. Insurance
companies are like cops: They take drinking and driving extremely
seriously.
5.
Space out your bill:
Your insurance company will only cover you for so long
without dumping you for non-payment. How long depends on the insurance
company and state regulations. But failing to pay is probably the biggest
reason for policy cancellations.
Cancellation:
not a pretty picture:
When you shop for replacement coverage after a
cancellation, you’ll be asked if another company ever cancelled your
policy. Deny it, and you’ll undoubtedly get caught. Admit it, and the
company may not offer you insurance at all or, if they do, you’ll pay
a higher price.
Bottom line?
When it’s time to
break up with your insurance company, you need to be able to say, “It’s not me,
it’s you.” Because if you’re the problem, you’ve likely got bigger bills and
more hassle coming down the road.
