Insurance Policy Cancelled

As if finding good insurance coverage at a cheap rate wasn’t hard enough, you just received a notice in the mail stating that your insurance policy has been cancelled.

There are a couple of reasons why you may have received this cancellation notice.

It’s important to know that an insurance company normally has 60 days after they issue your policy to cancel it for almost any reason.

Typically, cancellations within this period are processed if you do not meet underwriting guidelines, e.g. your driving record isn’t acceptable, or your vehicle doesn’t meet certain requirements.

There are certain circumstances surrounding which type of cancellation notice you may receive. Let’s look at some of the reasons your policy may have been cancelled.

The number one reason an insurance policy is cancelled is due to non-payment of premium.

When your policy initially starts, you have to make a downpayment, normally one month’s insurance premium, but in some cases it can be as little as nine percent.

If you fail to make the next payment due, the insurance company will cancel your policy. While state laws vary, you typically must be given 10 days written notice that your policy will be cancelled for non-payment of premium.

This is done to give you the opportunity to get your policy back up to date.

Another common reason a policy is cancelled is a suspended or revoked driver’s license shows up on the policy. Remember, it doesn’t necessarily have to be yours.

Perhaps you have a spouse or dependent on your policy whose license is suspended or revoked. In either case, the insurance company has the right to cancel your insurance at this point.

There are some companies who allow suspended or revoked licenses, but that is rare and typically outlined when the policy is purchased. Normally, those drivers have to be excluded.

Finally, your insurance company can and will cancel your policy if your application contains a material misrepresentation (fraudulent statement).

An example of a misrepresentation may be stating you are not married (when you actually are) to obtain an auto policy with a lower premium because your spouse has a bad driving record.

Having your policy cancelled does not mean you cannot obtain insurance from another company. If you were cancelled for non-payment, you may have the option to reinstate your policy with the insurer if you pay all the money owed to them within a certain time frame, typically between 10 and 30 days, depending on which company you are insured with.

You will likely have to obtain insurance through another company if you were cancelled for any other reason.

If this is the case, I recommend shopping online or contacting an independent agent who can find you an insurer that specializes in your particular risk type.

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This post was written by The Truth Team on April 2, 2010 Comments (0)