Can a New Car Insurance Policy Be Canceled after Premium Paid?

Generally, motorists are cautious to change auto insurance companies especially when they are not a straightforward risk. Usually there is no real reason behind this approach and people are just looking for excuses not to go to the trouble of checking for quotes, comparing them and choosing the most suitable offer. However they would have one good reason if the new vehicle insurer can cancel a policy even after accepting the premium.

You would need to look for yet another coverage if you are dropped shortly after switching. This may sound annoying but it is a rare occurrence to be bothered about. They check carefully before they place any vehicle on risk and they don’t usually like to lose paying customers.

A car insurance company has certain period to change mind about a new policy they issued. For example, this is 60 days in Pennsylvania. They can cancel it within this period if they are not totally happy with the risks they took or they discovered new information.

This may sound unfair but policies are based on details provided by applicants on proposal forms. Until someone contacts them they have no idea about such person. Most of the time the particulars are accurate and no action is taken. This assumption of information provided being true allows the industry to arrange coverage swiftly. That is why it may be understandable that states allow them to change their mind.

Nonetheless, they cannot change their mind about a policy issued because of age, occupation, marital status or any other discriminatory reason. There has to be a serious problem somewhere for change of heart on their part and it is usually something big that they cannot overlook. For example, too many speeding tickets on the record that weren’t mentioned before or a latest addition could tip the balance against.

Reading this post many people may think that automobile insurance companies are quite finicky in the way they do business. It is not the case and cancelations hardly ever happen. So, good to know about it but it is not something most motorists should lose sleep over.

So, you can check and get quotes to your heart’s content and switch if you want. You should make a clean record count and get the best value coverage. There are countless studies showing that loyal or lazy drivers are not usually rewarded. Often, latest offers are used to attract more customers and not to keep the existing ones happy. This is good to know too.

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