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Reasons Your Auto Insurance Policy can be Cancelled and What Next?

Have you received an auto insurance cancellation letter or a non-renewal notice from your insurer? If so, then you need to know that your auto insurance policy is about to be labelled as null and void. Most insurance companies use these two outlets to inform policyholders about the impending annulment. It’s a polite way of informing that you’ll not be renewing your auto insurance policy come your next renewal date. There are a number of reasons as to why your automotive insurance may be cancelled; it could be because of late payment or fraud. Whichever the reason, policy cancellation does not reflect well on your record.

Prior to submitting your application, it’s always important to compare auto insurance quotes provided by the different insurance companies. That way, can be able to select an insurance cover with the rates that complement your financial abilities.  Browsing the different auto insurance quotes online can turn out to be the best way identifying the affordable auto insurance covers.  Here are some of the reasons as to why a policyholder may receive a revocation letter or a non-renewal notice:

Lack of payment

Obvious as it seems, keeping your auto insurance policy active is of utmost importance. The only way a policy can remain active is by paying regular premiums. Late payments or failure to pay attracts the termination penalty. Most insurance companies are however considerate. Before cancelling your policy, they’ll contact you in order to remind you of the impending cancellation before issuing you with a legal notice.

Fraud

In such a case, a policy revocation can only take effect after the auto insurance company has verified that the policyholder used unscrupulous ways/deceived the insurer for financial gains. This is a serious offence among insurance companies that warrants for a policy termination. In some cases, the cancellation is normally followed by criminal charges.

 Licence revocation or conviction charges

Insurance companies are cautious when it comes to convictions and reckless driving. In order to protect themselves and other parties, a reckless driver’s policy may be cancelled if the insurance company finds out that the driver has a serious moving violation and has caused a lot of accidents. If also a driver’s license is forcibly revoked, their policy can be lost.

What next after cancellation?

Immediately after termination, you are best advised to find a new coverage to avoid losing your driving privileges. It will also help relieve some of your burden in an event where you get involved in an accident.  Since your options might be limited, conduct a further research to find the best auto insurance quotes available for you at present.

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