Top Reasons Auto Insurance Companies Drop People

by Kristen R. Price
A number of actions can result in your car insurance company dropping your coverage.

If you own a car, chances are you already know you’re required by law to carry auto insurance. While getting that insurance may be a simple process, you also need to make sure you keep that coverage. Every day, drivers get dropped from their insurance companies for a number of reasons. Make sure you know what actions may affect your coverage – and which could result in you losing it.

Failing to Pay Your Premium

Sounds pretty basic, but insurance companies are businesses; they provide an insurance product in exchange for a policy payment. If you miss your premium payments, your insurance company could (and probably will) choose to drop your coverage. Since insurance companies provide a non-tangible product, they don’t have to worry about collection companies or asset repossession. Depending on your state or insurance provider, your company could drop your coverage the minute your payment is late. So if you’re in a car accident after that point, you may be in hot water.

Getting Too Many Tickets or Violations

If your driving record has begun to deteriorate, your insurance company may choose to drop you. Insurance companies determine your premium rate by assessing the risk of insuring you. If you happen to have five speeding tickets in a month, for example, your insurance company may simply decide you’re too risky to insure. In the case of moving violations, your insurer likely won’t run your driving report until your policy is up for renewal – at which point they may opt not to renew you.

Moving

If you move from the location you originally kept your car when you purchased your auto insurance policy, you’ll need to immediately notify your insurer. Your location has a big impact on your insurance rates, as your insurer may consider some locations riskier than others. If you move to a location where your insurer doesn’t provide coverage, they will likely drop you. Additionally, if you move and fail to notify your insurance company, they may drop you or use it as a reason to deny an insurance claim.

Drinking and Driving

You already know you shouldn’t drink and drive. But if you do, be warned: you may lose your insurance coverage. Driving drunk greatly increases your chances of getting into an accident, which means insurance companies will consider you very risky to insure. That’s why drivers who have a DUI conviction on their record not only face criminal fees, jail time and possible license suspension, they also have a harder time getting insurance. If your insurance company does not drop you after a DUI conviction, you can expect your premium rates to skyrocket.

Dishonesty

Like most people in this world, insurance companies don’t appreciate being lied to. If you happen to offer false information – like who drives your car, the length of your commute or a ticket or two on your record – your insurance company may use this as grounds to terminate your service. Since your insurance company is assuming your driving risk, they require knowledge of exactly what that risk is. That’s why it’s best to be honest up front.

About the Author

Kristen Radford Price began writing in 2005 for her campus newspaper. She has served as a feature writer for the life-and-style section of the "Daily Herald," a contributor to "Utah Valley Weekly," an editor for a small publishing house and now as director of communications for an Internet company. Radford has a Bachelor of Arts in journalism from Brigham Young University.

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