A requirement for having the privilege to drive a vehicle is maintaining an active insurance policy through a licensed personal car insurance agency.
In most cases, paying the auto insurance bill on time is required to keep the policy active and protective.
There are times when personal automobile insurance agencies can cancel an active policy; however, drivers must understand how and when this can happen to avoid these situations.
The Difference Between Cancellation and Non-Renewal
When a personal car insurance agency drops the coverage on a customer’s vehicle, that means the vehicle and driver are no longer protected by the driver’s liability insurance and comprehensive or collision coverage if that was carried on the policy.
Policy cancellation means the auto insurance company has stopped the driver’s coverage during a policy period and refuses to continue the policy.
Non-renewal means that the agency refuses to let the customer renew their personal auto insurance coverage at the start of a new policy period when the bill comes due.
Though both mean the driver and vehicle will no longer have any insurance coverage, having a policy canceled is worse than non-renewal as it infers the customer has become enough of a driving risk that the company wishes to end coverage as soon as possible, even when it means refunding some premiums.
What Are Common Reasons That Personal Auto Insurance Agencies Drop Customers?
Personal car insurance agencies are ultimately in business to protect their clients within a profit margin so the companies can stay in business.
Based on the given idea, some customers can find their auto insurance dropped when they become a greater liability and cost risk based on the collected premiums.
Some examples of what can cause a personal automobile insurance agency to drop a customer include:
- A history of missed or late premium payments.
- Failure to keep the vehicle properly registered and inspected.
- Having a driver’s license suspended or revoked.
- Making a fraudulent insurance claim.
- Having too many at-fault car accident claims in a certain period.
- Not fully disclosing essential information about the vehicle or driver can affect the premium.
- A personal vehicle is being used for business purposes.
Contact An Auto Insurance Agency If Coverage Has Been Dropped
Although some of these reasons for cancellation or non-renewal can be negotiated or corrected, others are non-negotiable depending on the personal car insurance agency’s business policies and their rules for maintaining coverage.
To avoid policy cancellations or non-renewals from any automobile insurance agency and keep premiums as low as possible, drivers must avoid the concerns listed and maintain a safe driving record.
Any time someone learns that coverage from their car insurance agency has been discontinued, they should reach out to their agency to find out why.
About
Insurance agencies such as Service Insurance Group are prepared to work with clients to ensure they have the types of insurance needed to protect homes and businesses from covered losses.
If looking for any personal or business insurance, the Agents at Service Insurance Group shop for the right person or business insurance policy to fit individual needs – call them at (979) 300-7345 to get a quote!
