There are several reasons why car insurance might be canceled by the insurance provider or by the policyholder themselves. But what happens if car insurance is canceled? Having insurance is a legal requirement before taking a vehicle out on the road, so making sure that the car is covered before driving again is essential. No driver can legally take a vehicle out onto a public road without having at least the minimum level of insurance coverage protecting it. That means that an insurance cancellation is a serious issue that needs to be considered and dealt with to avoid problems and potential legal consequences.
When Can Car Insurance Can Be Canceled?
There are several reasons why an insurer may cancel a driver’s policy. If the driver has failed to pay their premium, if they haven’t fully declared all relevant information or if the policyholder has committed fraud, the insurer may refuse to continue to cover the driver. Meanwhile, you may choose to cancel your insurance policy at any time for several different reasons. Perhaps you are selling your vehicle and not replacing it, or your car is off the road for an extended period of time, so it isn’t worth paying for insurance to cover that period. Also, policyholders may choose to cancel their existing car policy if they choose to take out coverage from a different insurer to benefit from a multi-car policy or a discount for bundling their home insurance policy with their auto.
Reasons for Which the Car Insurance Can Be Canceled
Generally speaking, an insurer may cancel a driver’s policy for three main reasons:
The first reason is non-payment. When a driver purchases car insurance, they must pay a premium either as a one-off sum or via monthly installments. There is a legal obligation to make these payments on time, and if a driver fails in this obligation, the policy can be canceled by the insurer. Usually, the insurer will warn the policyholder before canceling in these circumstances to give them the opportunity to make payment. If you’ve experienced a life changing event, such as the loss of your job, that may impact your ability to make premium payments on time, it’s better to let your insurance company know as soon as possible. Most insurance companies will try to work out a solution with you.
The second reason is fraud or misrepresentation (including non-disclosure) of material facts. Sometimes, drivers fail to provide accurate information to an insurer regarding important events or circumstances, such as prior motor vehicle accidents, past damage to the vehicle or past claims when they set up their new policy. Not only does inaccurate information mean that the insurer can’t properly price the policy, but it also means that they can cancel the policy when they discover the fraud/misrepresentation. Not only is fraud a reason for insurance cancellation, but it also has legal ramifications.
The third common reason for cancellation is the suspension or revocation, during the policy period, of the car’s registration or the driver’s license of a usual operator of the vehicle. Be sure that your vehicle’s registration is renewed on time and that all regular drivers of the car have a valid license.
If an insurer cancels a driver’s policy, the policyholder needs to contact the insurer immediately to try to resolve the issues. Normally most insurers will give the driver ample notice prior to cancelation. Sometimes, the problem can be fixed through a simple call if the cancellation has occurred due to an oversight or administrative error. However, if the problem cannot be resolved, the driver must look around immediately for a new insurance policy to make sure they are covered when they take to the road.
Make sure your auto insurance with MAPFRE is up to date by contacting your Independent Agent. If you’re not yet insured, you can get a fast, free quote today on your Massachusetts car insurance policy. Get outstanding coverage and potentially save money too!