Perhaps not in an alarming rate but auto insurance cancellations do happen and policyholders get caught unprepared when it does happen. It is worth knowing what happens if car insurance is cancelled all of a sudden. Probably first thing vehicle owners would be thinking is how to get vehicle insurance after being cancelled.
It is best to start with understanding the circumstances surrounding car insurance cancellation. Then, we can see where we are at and what we are up against. So, we need to have a look at why an auto insurer may terminate a policy and try to find answers to your supposed question of what happens if my car insurance is stopped after one of below issues.
When Can Auto Insurance Companies Cancel Policies?
What would give rights to insurers to cancel car insurance policies? For example, would they end it when they find out about a DUI? Here are a few reasons why an auto insurance policy could be cancelled.
1. Non Payment of Premium
Quite often policyholders are informed with a note saying; vehicle insurance cancelled for non payment. You cannot expect insurers to give away the policy. You will have to pay at some point and it is better be sooner rather than later. Some companies can be really quick to end a policy after missing a payment. A few companies would give around two weeks grace period but you should not count on that. They may still dispute a claim submitted in that period. Unless they have explicitly mentioned in their policy that they will offer certain grace period, technically you broke the contract by not making the payments. Missing premium payments is probably the most common reason for auto insurance cancelation.
What happens if my car insurance is cancelled due to nonpayment? First thing you would do is to contact the insurer and find out if they would reinstate the policy. They may if you are prepared to pay the outstanding amount. However, most insurers would insist on receiving the full premium before they reinstate any automobile insurance cancelled for non payment.
If you are having no luck with your current insurer you should be quick to re-insure your vehicle for several reasons. First of all, you are now uninsured since termination and you cannot drive your car and it isn’t insured for any damages. And, DMV will most likely be informed by your insurer that your liabilities auto insurance dropped. Furthermore, there is a chance that your non premium payment will show on your credit score and other insurers won’t like it. So, you should get cheap online automobile insurance quotes and pick a policy that you can afford if your car insurance gets terminated.
2. Auto Insurance Frauds
Giving false information so that you can get cheap automobile insurance or get paid for a claim you should not have been is a fraud. Knowingly providing false information for financial gains is fraud. Not only you can get your policy terminated but may face criminal charges as well. Insurers are known to be tough on fraud. One of the reasons is that they wouldn’t want a dishonest policyholder. However, the main reason for canceling the policy and pressing charges against the fraudster is to discourage others trying the same.
What happens if car insurance is terminated because of frauds? It is fair to say that there is no getting back with your last insurer. Actually, you would pray that they don’t press charges against you. So, again try to get automobile insurance from somewhere else as quickly as possible before anything appears on your insurance, claims or criminal records.
3. Driving Licence Suspensions or Revocation
If you lose your driving license you cannot drive and therefore your policy should be canceled. It is possible that you can persuade your insurer to keep insuring your vehicle for theft, fire and weather related damages as long as you agree to take it off the road. If one of the listed drivers lose driving license or get suspended that driver should be removed from the policy.
4. Major Traffic Moving Violations Tickets
These can result in policy cancellations. A driving under the influence of alcohol or drugs (DUI) conviction is a good one and many insurers would cancel a policy after a DUI. They may cancel policies when the driver suddenly gets a few moving violation citations too.
What happens if my auto insurance is cancelled due to tickets? Unfortunately, every other insurer would know about your driving convictions the moment they go on your motor vehicle record with DMV. Your rates will go up whichever insurer you turn to. Read the post where this question is already answered; does your insurance go up if you get a ticket. Also, you can read this post that explain what is a high risk driver and how you can get cheap high risk auto insurance.
5. Impairments and Major Health Issues
In some cases, coverage may be canceled if a driver is diagnosed with a certain medical condition that makes it unsafe to drive. In Illinois, for example, insurers can cancel a policy if a driver is diagnosed with epilepsy and the driver’s doctor doesn’t provide proof that the condition will not impair driving.
What happens if car insurance is Ended due to Health Issues? It is probably already clear to you that you cannot drive with a drivers license. What happens to your insurance depends on what you want to do with your vehicle. If you are selling it you probably don’t need insurance any more. You can probably insure your automobile for fire and theft if you convince an insurer that you won’t drive it. Also, you may be able to buy insurance without drivers license in your circumstances if you can find a primary driver to add to your policy. If you cannot drive anymore perhaps someone else cannot drive it for you. In that case, you may be able to buy another policy or reinstate your original policy with new terms and conditions.
If your auto insurance gets cancelled, first thing you should do is to find out why and if it can be reinstated with the same insurer. Don’t waste any time and find another policy from another insurers if you cannot reinstate the old policy.