What to Do If Your Car Insurance is Cancelled

On certain occasions, an auto insurance company may choose to cancel a policy. If this happens, there is a risk of driving without the appropriate level of insurance and this can result in fines, a DWI conviction and the possible loss of driving privileges. It is vitally important to understand the reasons behind a policy cancellation and how the situation can resolved.

If a policy is cancelled, this usually happens within the first 60 days of issue. There can be a number of reasons behind a cancellation but one of the most common factors is providing false or misleading information during the application stage. Undeclared claims, failure to provide information about DUI or DWI convictions and false personal information can all lead to a policy being withdrawn. Additionally, a policy can be cancelled if monthly payments are missed.

The insurance carrier is obliged to inform the policyholder of any cancellation in writing although coverage will usually be withdrawn with immediate effect. Once cancellation takes place, it will be illegal to use a vehicle for any purpose and in some states, registration and plates will automatically be recalled. If there is an outstanding loan on the vehicle, a new policy should be purchased immediately otherwise the terms and conditions of the finance agreement will be violated. When a new policy is applied for, it is advisable to be as factually accurate with information as possible. It is also recommended that the new insurer is informed of the recent cancellation in case it comes to light at a later stage.

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