Advice for Those Being Dropped By an Auto Insurance Company That Can Go a Long Way
You just found out you’re being dropped by your auto insurance company, just as you’re planning that weekend trip to your best friend’s wedding—which is just four weeks away. If your insurance followed proper procedure, you got this wonderful news in time enough to rectify the situation and still be able to start packing. Getting dumped by your auto insurer is what you never want to happen during your driving years, but it does and can happen to the best of us. Once it does, bouncing back can be an uphill battle, but it is possible.
The most common reasons for an auto insurer to drop a policyholder are: non-payment of premium, misrepresentation of facts regarding driving/claim history and the number of drivers accessing the vehicle, or the policyholder or a member of their household has had their driver’s license suspended or revoked during the policy period. Your insurance carrier can cancel your policy at any time should any of these offenses be committed. If a blemish on your driving or credit record is found during the “binding period” (a 60-day period after application for insurance during which your risk is determined), the insurer may deem you an unacceptable risk and cancel the policy.
An auto insurer can also elect not to renew your auto insurance policy at the time of renewal if it is determined that you made an excessive amount of claims for at-fault accidents, received too many traffic citations or were convicted of driving under the influence during the last three to five years. Another perhaps unforeseen reason for an impromptu cancellation is that the insurer no longer offers the type of auto insurance you were covered under.
If an auto insurer decides to cancel or not renew a policy, it must send a written notice to the policyholder. State insurance laws vary, but the typical notice timeframe is between 10 and 30 days prior to cancellation. Depending on the insurer, the notice may or may not contain a reason for the cancellation or non-renewal. If no reason is given, you can send a written request to your insurer. If you receive a response and you do not agree with your insurer’s decision, you can contact your insurance company’s consumer affairs division or your state’s department of insurance.
You can get auto insurance after being dropped by your insurer, but it may be difficult. If the reason for cancellation was due to non-payment, being reinstated with your former insurer is most likely out of the question, and going with a new one may require upfront payment of the full premium. Finding a new insurer will be a challenge, because many insurers are leery of recently or previously canceled policyholders. If you do find one, plan on paying a much higher premium since you will now be considered a high-risk policyholder. Maintain a good driving record and pay future premiums on time, and eventually you will enjoy lower premiums–and a good relationship with your auto insurer.