The cost of insurance is always on the rise but you need insurance to drive. That’s why it’s very stressful to receive a notice of insurance cancellation in the mail, especially if you have no idea why your policy has been cancelled.
Top Reasons Insurers Cancel Policies
Insurance policies can be legally cancelled by your insurer for a number of reasons. If you’re wondering why your auto insurer in Ontario cancelled your policy, consider these top three reasons:
- You didn’t pay the premium. Non-payment is the most common reason insurers cancel policies. Many times, this is an oversight and your insurer may be tolerant of new policyholders. However, paying your policy late habitually may result in cancellation. The same thing happens if you don’t pay the electricity bill or miss payments on other utilities.
- You’re no longer eligible. This covers a range of reason you no longer meet eligibility requirements. Sometimes you can correct the issue, but some circumstances may be beyond your control. For example, you might move to an area that’s not covered by the insurer or other circumstances may arise that make you ineligible for coverage.
Another reason you might receive a cancellation notice involves racking up a bunch of traffic tickets. This could make you ineligible under the company that currently insures your car. Your insurance broker might be able to find alternate coverage with an insurance company that handles high-risk policies. If you also receive a cancellation of your driver’s license, you’ll need a Mississauga insurance broker that concentrates in helping you recover your insurance eligibility.
- You failed to notify your insurance company about change that poses a material risk. In the world of insurance, a “material change in risk” refers to an issue that can impact your eligibility or change the kind of coverage needed. This type of cancellation typically occurs because your risk profile has changed. A material change could be signing up for vehicle sharing program or any other big change to your driving habits. If you don’t report the change to your insurance company, the policy might be cancelled.
Having your policy cancelled isn’t necessarily the end of the world. There are steps you can take to become eligible.
What Happens After a Policy Cancellation?
To begin with, your policy cancellation can cause a lapse in coverage, so you won’t have insurance until you get a new provider. This means you won’t be able to drive until you resolve the reason for the cancellation or find a new provider. Expect to pay a little more with the next provider and know that any cancellation on your record will make it a bit more difficult to secure a new policy.