Motor Insurance

What to Do If You Lose Your Motor Insurance

•They’re the words no one wants to hear from an insurance agent: “We can no longer provide coverage for your vehicle.”

•There are two ways you might be dropped by your auto insurance company: Nonrenewal or cancellation. Nonrenewal happens when your insurer decides to part ways with you at the end of your policy term.

•It might be for business reasons that have nothing to do with you, or it might be because the company views you as a higher-risk customer — perhaps because you’ve made insurance claims.

•Cancellation is more severe and happens when the insurance company decides to stop coverage before the end of your term. State law often dictates the situations in which an insurer can cancel your policy.

•If you find yourself in either of these situations, here’s what to do.Nonrenewal: Start shopping Your insurer might choose not to renew your policy for reasons that have nothing to do with your driving record. For example, it might phase out a certain kind of coverage or decide to write fewer policies in your region.

•Cancellation: Be prepared to pay moreCancellation is much more problematic because it happens as a result of your behavior. Insurers often cancel the policies of customers who:Misrepresent themselves on their applications Receive license suspensions or revocations Are convicted of DUIsHave numerous accidents and/or moving violations

•Don’t pay their premiums Again, insurers must provide notice. In California, an insurer must deliver a cancellation notice at least 10 days prior to the effective date if the reason is nonpayment, or 20 days prior if the cancellation is for other reasons. Your insurer will refund any unused premium.

•If you receive a cancellation notice, you’ll probably have trouble finding coverage from other standard motor insurance carriers and will have to pay more for coverage through the “nonstandard” insurance market.

•Depending on the reason for your cancellation, your nonstandard premium might be 10% to 50% higher than your standard premium, according to Richard Munoz, who owns a State Farm agency in Austin, Texas.

•Can you fight it?Maybe. If you think your nonrenewal or cancellation is unfair, call your agent or insurance company and ask for details. Best case scenario: The situation is a misunderstanding or can be easily fixed.

You also have the right to complain to your state insurance department if you think your insurer is treating you unfairly.

•Other insurance optionsWhat if you can’t resolve a cancellation? Welcome to the nonstandard market. About one-fifth of the auto insurance market is made up of these policies, according to the Insurance Information Institute.

Both specialty insurers and divisions of major insurance companies issue nonstandard policies. For example, Nationwide owns nonstandard insurers Titan and Victoria, and American Family Insurance owns The General.

[Source: https://www.nerdwallet.com/blog/insurance/car-insurance-policy-cancelled/ ]

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