Why An Insurer May Refuse To Renew Your Coverage
The purpose of car insurance coverage is to protect drivers, passengers, and pedestrians from injuries sustained in an automobile accident as well as cover any costs resulting from property damage. The insured person pays a monthly or yearly premium and in turn, the insurance company provides them with an insurance policy to protect them from financial losses.
An insurance policy is normally in effect for a year at a time. Once the policy term is up, the insurance company may offer renewal for another year or they may choose to refuse to renew your insurance policy. There are several reasons why they may not renew your auto insurance.
If you are on monthly payments or even if you pay the entire year up front, your insurance company may refuse to renew your policy for non-payment. If your renewal date comes and goes and you do not notify your insurance company that you intend to renew and you do no provide payment, they will assume that you decided to obtain car insurance quotes elsewhere and they will not continue your coverage. If you miss your monthly payments, they also have the right to cancel your policy mid term or if you are up for renewal, they may not offer you continuing insurance.
If you have accumulated too many traffic violations, such as speeding, or DUIs, your insurance company can refuse to renew your policy. This puts a driver into a high risk category which means that they are a higher risk to be involved in an accident or file a claim.
Fraud or material misrepresentation is another reason for an insurance company to not renew a policy. This basically means that you have lied to the insurance company about your driving record, your vehicle, or anything else that can affect your premiums and coverage. You have intentionally misled the insurance company in order to personally gain. Either you were hoping to secure coverage that you do not qualify for or you intended to get this coverage at lower premiums.
If you have been involved in an automobile accident and your vehicle is a total loss, your insurance company will not renew your policy. Unless you add another vehicle to the policy, there is no need for the company to insure you anymore.
If your insurance company has cancelled your auto insurance policy for any of the above reasons, you should obtain car insurance quotes and secure a new policy as soon as possible. If you are caught driving without the minimum required car insurance coverage, you could face heavy fines and if you cause an accident, you will be responsible for any costs incurred from property damage or injuries.