Can my insurance company cancel my policy once I buy it?
January 30th, 2021
Driving without car insurance is reasonably close to walking around with a gun that has one bullet left in the chamber. Sure, the bullet may not be up next, but you can guarantee that it will all catch up to you and hurt you eventually. So what happens when your insurance company cancels your policy unexpectedly and you are left with no insurance, suddenly, on your vehicle. Here are a few things for you to consider.
If you don’t pay your premium to your insurance company you are in breach of your contract (your policy) with them and they can cancel your policy. However, they must give you at least 30 days notice that this will happen and reimburse you any premiums you paid and weren’t given coverage for. If the company cancels your policy they also shouldn’t be allowed to charge you for the cost of cancellation.
Another time that your policy can be cancelled after it is started is when your driving privileges are revoked by the state. If your driver’s license is suspended or revoked the insurance company can cancel your policy because you are no longer legally allowed to drive. The same details are in place in that you must be notified at least 30 days in advance and reimbursed for anything that wasn’t earned by the insurance company.
The insurance company has the right to cancel your policy in these situations or they can issue a non-renewal, which is quite common. This means that your policy is good until the next renewal date (usually each 6 or 12 months) and then it will not be renewed. This is generally done when you have become too much of a risk due to a DUI, multiple driving violations or multiple accidents that were your fault.
Remember that your insurance company owes you the coverage for the days that have been paid, but you still have to pay. Failure to pay your policy premiums can result in loss of coverage, which could be financially devastating to you.