In general, insurance companies can cancel your policy for any reason during the first 60 days of the policy. However, they don't usually cancel policies for no reason. This is usually because the risk you present to the insurer has changed since you filed the claim. An insurance company has the right to cancel your policy if it fails to meet its obligations under the policy agreement.
However, by using resources such as NAIC, which can offer free advice and services to policyholders, and by trying to negotiate with your insurance company, it is possible to keep your insurance. If your insurance company says it's going to cancel your policy, you still have options to prevent that from happening. The best thing to do is to act quickly. Once an insurance company informs you that they are canceling your policy, you have little time to get things back on track.
Here's what you need to know to protect yourself from canceling your policy. This is because having a gap in your insurance history is considered a greater risk, which generally translates into higher insurance premiums. If you cause a car accident while driving without insurance, out-of-pocket expenses to pay for other people's medical bills and car repairs could seriously affect you. As long as the accident occurs before the actual cancellation or non-renewal date indicated by your insurer, your insurer is required to cover the claim based on the limits set out in your policy.
If you can't afford your car insurance payments, contact your insurance company as soon as possible. An auto insurance company is required to give you advance notice of the cancellation, which is usually sent by mail or electronic delivery. Auto insurance companies can leave you as a customer if you file a claim after an accident, but the good news is that you're more likely to face a non-renewal than a cancellation. Your car insurance company must give you 10 days' notice of cancellation due to non-payment of the premium and 20 days for any other reason.
Non-renewal, on the other hand, occurs when an insurance company decides to end its coverage when the policy expires. If you are still planning to own a car, make sure you have started coverage with another insurer before canceling your current car insurer. It may be due to an increase in claims on your part, but it could happen if your insurer makes a general rate adjustment for the type of coverage you have. Every insurer is different, and the ratio of how much the insurance company has paid in its claims to Your insurance company must give you 10 days' notice of cancellation for non-payment of the premium and 30 days for all other reasons.
Canceling car insurance is a good idea when you plan to switch to a cheaper policy, one with better coverage, or both. Make sure you take your case to the right people and you may be able to negotiate some policy terms that will help you stay insured and protected. Your car insurance company must give you 10 days' notice for non-payment of the premium or 30 days for any other reason.