Beware: 5 Ways You Can Lose Your Auto Insurance
Given all the other responsibilities you’re juggling lately, it’s completely understandable that car insurance doesn’t frequently cross your mind. Nonetheless, concerns might creep in, like pondering the number of accidents it takes for your insurance to cancel your policy. Even though insurance providers don’t explicitly state a specific threshold, experiencing several accidents within a condensed timeframe could prompt them to reconsider your policy.
The connection between drivers and insurance companies is such that both parties need each other. After all, drivers can’t hit the road safely or legally without car insurance, and car insurance companies need customers to stay in business.
There are essentially five ways that you can lose your auto insurance, and we thought it is important enough to build a quick guide to walk you through the different issues.
#1 – Not Paying Your Monthly Premiums
To get started, we definitely have to state the obvious: If you don’t pay your monthly premiums, the insurance company will cancel your policy. You must have an active policy at the time of an accident.
The insurance company will conduct a formal investigation to decide if your policy is truly expired or not, but it’s better to know without a doubt that you have an active policy.
If you’re having trouble paying your monthly premiums, you may have to adjust your coverage temporarily until your financial situation improves. Paying down debt can make it easier to handle month-to-month obligations like insurance. You could even switch to a used car to save money on insurance and other car expenses.
#2 – Too Many Accidents
As mentioned before, no insurance company posts how many accidents you can have at one time before you receive a letter canceling your insurance policy. However, your driving record does play a strong role in your insurance rates. Even if you don’t get your policy canceled, you can expect to pay a significant amount every month to make up for the risk of covering your vehicle.
#3 – Bad Driving History from Another Named Driver
Think that only your driving history matters when it comes to having an auto insurance policy canceled? Guess again. All named drivers on the policy have the potential to get a policy canceled. So if you’re a great driver, but your spouse isn’t, their driving history can cause a policy to be canceled.
Even if your policy isn’t canceled within the current term, that doesn’t mean that your insurance company can’t send a letter advising that they have decided not to renew your insurance term with them. They can do this based on the number of accidents any named driver has had in the term.
#4 – Health Issues Can Cancel Your Policy, Too
No matter where you do most of your driving, the overall rules are still the same. Indeed, you must remain a driver in good standing that can safely drive without endangering yourself or the other people on the road. Unfortunately, multiple health issues just don’t mix well with driving.
People living with epilepsy are often susceptible to seizures at any time of the day or night. It would be terrible to have a seizure when you’re driving because there is no way to control your vehicle safely. Multiple accidents have occurred over the years due to someone having a medical emergency.
In many states, you cannot have uncontrolled seizures and operate a car. For example, in the state of Texas, you have to have three continuous months seizure-free in order to drive.
If you’re in a state that requires people suffering from epilepsy to have medical supervision, it’s important to remain compliant and stay in touch with your doctor. Even if you’re healthy, seeing your doctor regularly is a great way to monitor for potential health dangers in the future. That way, if you need a letter regarding your health, they can produce it quickly for you.
The insurance company reserves the right to cancel your policy if you can no longer operate a vehicle safely due to the high risk of having a medical emergency while driving.
#5 – License Suspended or Fully Revoked
Getting in trouble with the law has an impact on your driving privileges. In the event of reckless driving, drugs, or alcohol, you can have your driver’s license suspended or even fully revoked if you fail to correct your driving behavior.
Once your insurance company is notified that your driver’s license is revoked, they can indeed cancel your auto insurance coverage. This means that you will have to first work on getting your license reinstated, and then you will have to find another insurance company after it’s been taken care of.
However, keep in mind that this means that your rates will go up because your risk profile has changed.
It can take time to find a company that will not only take you on as a policyholder but also offer a rate that you can still afford.
Knowing How to Appeal Unfair Decisions
While many car insurance companies may feel that they’re in the right to cancel your auto insurance policy, the truth is that there could easily be circumstances where you deserve a second chance. If they are canceling due to the number of accidents, but you have plenty of accidents where you aren’t at fault, you could try to appeal the decision.
If you decide to take this path, you’ll want to start by writing an auto insurance claim appeal letter. Keep to just the facts and explain why you think you deserve to have your auto insurance policy reinstated.
While there’s no guarantee that you’ll get it reinstated, it’s definitely worth a shot. If that doesn’t work, and you want to escalate further, you can write to your state’s insurance commissioner. They have to investigate this and other insurance issues. If your auto insurance company doesn’t handle your case fairly, they will take action.
Be Extra Careful on the Road, Always
Avoiding car insurance cancellation is a good idea, both in terms of saving money on monthly premiums and also avoiding the stress of trying to appeal to insurance departments and multiple people.
The best way to go to avoid cancellation is to be extra careful in terms of how you drive. Some people like to install dash cams to make sure that in the event of an accident, they have video footage to show exactly what happened.
While the insurance company will not simply rely on dashcam footage, it is considered part of the claim, and the information is weighed against other details within the case.
Luke Williams writes and researches for the auto insurance comparison site, AutoInsurance.org. His passions include best practices for insurance, car ownership, and other ways people can drive with peace of mind.
