Can An Insurer Cancel My Policy?
Insurers can increase your premiums and change your insurance terms. But, did you know that they can cancel your policy? Here’s how.
Published: Tuesday, February 14th 2017
Many people are unaware that an insurer has the right to terminate an insurance policy with a client. You will, however, need to be acting somewhat immorally and illegally for this to happen.
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5 Instances An Insurer Has The Right To Cancel Your Policy
This is a breakdown of what you have to do for an insurance company to drop you as a client.
1. Fraud And False Information
Whether you have been deceitful on your application, or you have put in a fraudulent claim, actions like this can get your policy cancelled. When you are applying for insurance, the company insists on you being as truthful as possible in the application. Should you indicate an incorrect value of your asset, or not disclose where it shall be kept accurately, you can face termination. Make sure that your current policy is completely updated. Should you be parking your car in a different place, ensure that the insurer has this information.
2. You Have Stopped Paying Your Premiums
This can happen completely by accident, or on purpose. Should the insurer not receive your premium for one month, they have the right to cancel your policy. An insurer typically allows a five days grace period to make the payment. Beyond that, you might find yourself uninsured!
3. You Have Had Too Many Claims
Perhaps you are just accident prone, or perhaps you just have bad luck. If you have claimed from insurance too many times over the last few years, you could find yourself without cover. The insurer could deem you as a high risk to the company and will terminate the contract. If they have done an analysis of your account and found that your premiums are no longer covering what they are paying out, your risk profile will be deemed too high.
4. Lack Of Maintenance And Care For The Asset
Should the insurer find that you are not taking basic care of the asset that they are insuring, they have a right to remove the cover. It could be that you are not servicing your car, or leaving it unlocked in risky areas. In many cases, when you make a claim, the insurer will send out an investigative team to examine why you are making a claim. Should they find that you have been negligent, or have mistreated the asset, they can refuse to pay out the claim and drop you as a client. Make sure that your car is parked in a safe and secure spot. And, ensure that you are taking care of it at all times.
5. Change In Circumstances
This can refer to a change of your address, a change in employment, or a change in your behaviour. If you are suddenly moving to an area of high risk with your luxury car, the insurer will find your behaviour suspicious. Make sure to present your case in as much detail as possible, should you be changing address and the insurer requests an explanation.
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