Questions about policy cancellation often abound with insurance policy shoppers, almost as often as questions about types of insurance discounts. Sometimes the questions only arise after a bad experience with an auto insurance carrier left you wondering whether you were treated the right way as a customer. There are definitely some circumstances in which it is permissible for an insurance company to cancel a customer. As a tip, it is a good idea to get to know the contents of your policy including the language describing the contractual nature of your relationship with the insurance company.
Auto Insurance is a Contract
That is probably the first thing we ought to cover is the contractual nature of this relationship between an insured policy holder and an auto insurance company. Auto insurance is a contract between two parties. Like any other contract, it is subject to the terms and conditions agreed to by those two parties when the contract was first signed. In the case of auto insurance, both sides are bound to honor their responsibilities as outlined in the contract.
For the insurer, this means providing the products and services they promise, and delivering the coverage they say they will deliver when it is needed. For example, prompt claims response service is usually either expressed or implied as one of the responsibilities of the insurance company in the structure of this relationship.
Auto Owner's Contractual Obligation
And in exchange for this promise by the insurance company to provide the coverage they've sworn to provide, as customers we also agree to abide by some terms on our end of the deal. Chief among our responsibilities is to pay for our insurance on time in full or in installments according to the terms of the contract. And this brings us to the first reason why drives might get cancelled from their auto insurance coverage: nonpayment of premium.
If as a customer you fail to make even one payment on time, an insurance company can cancel you. Even if your payment arrives one day late, that company can cancel you. Most of them will not go to that extreme for one time late payments that arrive the day after they are due; but some deal harshly as soon as they see a pattern and may cut ties with a customer after only a few late payments. And according to that contract, they have every right to do so. After all, the insurance company in this case upheld their end of the bargain, so it was only fair for them to expect the same from you.
Avoid Getting Cancelled
There are other reasons we can get cancelled, many of them actually identified in the terms of our agreement. Most of these reasons have to do with some violation of the terms of the contract. In short, we need to keep our bargain with the insurance company and avoid getting cancelled.
This means making your payments on time, never misrepresenting the truth on an application, and generally keeping up with your end of the deal in every other possible way as well. Avoid getting policies cancelled and get in with a great insurance company offering low prices and quality coverage. Compare prices by using our free quote form and find the company that fits you best. Establish an honest relationship and get it set up to prosper on the long term. Smart car insurance customers recognize what a privilege it is to get into affordable low cost auto insurance policies, and they do what it takes to maintain their relationship with the insurer to prevent getting cancelled from their auto policies.
