How to Avoid Your Car Insurance Policy Getting Canceled
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In most states, car insurance is a legal requirement, and the coverage it offers is essential. Consequently, receiving an insurance cancellation notice can be scary and confusing. So how can you avoid having your car insurance policy canceled?
It is important to note that a cancellation is not the same as non-renewal. Non-renewals happen for many reasons, like filing too many claims, or getting too many tickets. Cancellations are rarer and usually more serious.
If your car insurance company is canceling your policy, try not to panic. We’ll explain what happens, how to avoid it happening again, and how to find a new provider before your current policy becomes void.
Having your car insurance policy canceled is almost never a pleasant experience.
What happens when your car insurance policy gets canceled?
If your car insurance company decides to cancel your policy, you will receive written notice beforehand. The amount of notice depends on which state you live in, but 30 days is fairly typical.
Why do car insurance companies cancel policies?
Insurance companies don’t cancel policies for no reason. After all, you are a paying customer and in an ideal world, they would want to keep your business.
As explained by Kelley Blue Book, the most common reasons are:
- You were dishonest when completing your insurance application.
- You have falsified or exaggerated an insurance claim.
- Your driving license has been suspended or revoked.
- You have been diagnosed with a medical condition that makes it unsafe to drive.
- You haven’t paid your monthly premium (most insurers will allow you 30 days to catch up—if you still haven’t paid after this grace period, they could cancel your policy).
How to avoid getting your policy canceled
As long as you follow these steps, car insurance companies will be clamouring for your business and you won’t get canceled:
- Be honest in your initial application and whenever you are submitting a claim. Lying for a lower rate or larger payout is a serious offense.
- Follow the rules of the road and never drive under the influence.
- Pay your bills. Most insurers will be willing to work with you on a payment plan if you are struggling. You just have to tell them before letting the policy lapse.
What to do if your car insurance has been canceled
As mentioned above, most providers give 30 days’ notice before canceling your policy. If this happens, immediately contact your car insurance company to see if they will reconsider.
If they won’t, dust yourself off and remember that everyone makes mistakes. You have enough time to assess your options and find a new provider before you have a lapse in coverage.
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