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By Danica Reynes
Car insurance companies can drop your coverage if you do not meet eligibility guidelines, you are considered to be high risk, you are involved in misrepresentation or fraud, or you have a record of major driving violations.
Even though car insurance must follow state policies, a provider may still cancel the coverage of a policyholder for a reason that does not involve violating state laws. Auto Insurance Leads might take some of the aforementioned reasons into consideration when listing possible clients. You may find it hard to find a different company to insure your car if your present insurer drops your auto insurance. If you know the causes why auto insurance gets dropped, you may be able to avoid this predicament.
You are not eligible
Insurance companies normally go through a 60-day period to determine if the applicant meets their requirements. If the insurer finds out information that is contrary to their prescribed qualifications such as multiple traffic violations or a previous record of unfavorable claims, your application can be rejected. Similarly, you could also be rejected if you are unable to provide the necessary documentation and requirements like a proof of your previous insurance coverage. In the event that your application is dropped, the company will normally send you a written notice ahead of time.
You are labeled as a high risk customer to the insurer
Proper assessment of whether an applicant will be inexpensive or risky for the company is a standard procedure of insurance companies. If you have been in too many car accidents and your previous insurance premiums were unable to cover the expenses, your insurer may cancel your coverage. Insurance companies prefer insuring low-risk customers and clients who pay their premiums promptly. On the other hand, people with felony convictions or poor credit history will be regarded as high risk and their coverage may be dropped. Although there are insurance groups that specialize in providing insurance for high-risk drivers, their policies are usually very expensive.
You are implicated with fraud or misrepresentation
In the event you were guilty of insurance fraud, the insurance company can end your coverage when it is legally possible. In addition to losing your coverage, you may face criminal charges. If the insurance company finds out that you misrepresented information, they could also drop your policy. This may happen even after the 60-day window has passed.
Your driving history has major traffic offenses
Cases like driving under the influence or reckless driving can cause insurance companies to terminate policies of their clients. This will be the case even more so if these violations result in your driver’s license being suspended. Driving violations will be eventually be discovered by insurance companies as they periodically examine their customers’ motor vehicle reports.
Despite the fact that there are many reasons that an insurance company can drop your coverage, you should keep in mind that you do have a number of driver’s rights protected by law. In cases where you feel that your driver’s rights were disregarded or that you were refused insurance coverage on unreasonable grounds, you may consult and file a report with insurance regulators.
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