At times, automobile insurers have no option other than cancelling the coverage. Perhaps not at an alarming rate but terminations happen and motorists get caught unprepared. Probably the first thing vehicle owners would be thinking is how to get covered again, if they can and want to still drive. So, they have to figure out what to do next to get out of the situation they are in with minimum loss.
Automobile owners are required to have at least state required minimum Liability insurance throughout the US. Driving without it and getting caught may result in heavy fines and/or imprisonment depending on the jurisdiction. That is why it is essential to make sure your policy remains active at all times, if you want to drive. Also, it may be harder and more expensive to buy coverage after being dropped by your automobile insurer.
It is best to start with studying the events surrounding vehicle insurance cancellations. Then, we can see the problems we have to face to know what to do next. It can just be a nuisance or a huge trouble depending on the cause. Here are the possible reasons and what can be done after the policy is terminated.
1. Non Payment of Premium
Some companies can be really quick to react after missing an instalment. Often they are required by states that they give a notice before canceling policies due to non-payment. The grace period can be between 10 – 20 days depending on the state and the insurance company.
When this happens, the first thing people should do is to contact them and find out if they would reinstate it. They may if you are prepared to settle the outstanding amount and not just the missed sum. Most of them would insist on receiving the full premium before they reinstate because they don’t want to deal with the same problems again at the next installments.
If you are having no luck with them you should be quick to reinsure your vehicle for several reasons. First of all, you now have no coverage and you cannot drive it since the consequences would be severe. And, DMV will most likely be informed that the liability car insurance is dropped. So, you shouldn’t allow the coverage to lapse much longer and make alternative arrangements. Usually, a lapse less than a month may not be visible or ignored. Otherwise, it would be harder and more expensive to find an alternative policy.
2. Automobile Insurance Frauds
Giving false information so that you can get cheap quotes or get paid for a claim you should not have been is a fraud. Knowingly providing false information for financial gains is deception. Not only you can get policy termination but may face criminal charges as well. Often companies press charges against the fraudster to discourage others trying the same.
It is fair to say that there is no getting back with them once they take action due to fraudulent activities. Actually, you would pray that they don’t press charges against you. So, again try to get coverage from somewhere else as quickly as possible to avoid facing policy lapses as well but expect to pay higher rates.
3. Driving Licence Suspensions or Revocations
If you lose the license you don’t have the privilege to operate an auto and therefore the coverage should be canceled. It is possible that you can persuade them to keep protecting the 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 loses a license or gets suspended, that person should be removed or never allowed to get back behind the steering wheel.
4. Major Traffic Moving Violation Tickets
Driving under the influence of alcohol or drugs conviction is a good reason and many companies would cancel auto insurance after a DUI. They may do the same when several moving violation tickets appear on the record suddenly. They simply like to get ahead of the claims.
First of all, drivers would probably get a license suspension in most states. So they cannot be insured for driving until it is over and they cannot avoid huge premium increases for several years afterwards. Unfortunately, everyone would know about the convictions the moment they go on record with DMV and they will stay there as much as seven years in many states. Rates will go up wherever you turn to. Then onwards, you would be considered as a dangerous driver and have to try and get affordable high-risk policies once you get back your driving license. This is one of those situations where you cannot expect mercy because you proved to be reckless.
5. Impairments and Major Health Issues
In some cases, coverage may be dropped if a person is diagnosed with a certain medical condition that makes it unsafe to operate a vehicle. In Illinois, for example, insurers can cancel a policy if a driver is diagnosed with epilepsy and his or her doctor doesn’t provide proof that the condition will not impair.
It is probably already clear that you cannot carry on or keep the license. What happens to your insurance depends on what you want to do with the vehicle. If you are selling it you probably don’t need it any more. You can probably protect it for fire and theft if you convince them that you won’t take it on the roads. Also, you may be able to buy insurance without a driver license in such circumstances if you can find a primary driver to add to your policy. If you cannot do it anymore perhaps someone else can use it or chauffeur you around. In that case, you may be able to buy another or reinstate the original policy with new terms and conditions.
As discussed above, it may be a big problem or just an inconvenience but your car insurance gets cancelled mostly due to something you have done or happened to you. They don’t just throw a fit and start dropping policyholders like flies. First thing you should do is to find out why and if it can be reinstated with the same company. Don’t waste any time and find another solution if you cannot carry on with them. Last thing you want is to get caught without it or face accident damages on your own.