Is Your Insurance Company’s Cancellation Policy Legal?
Sometimes we hear stories of people getting a letter in the mail from their insurance company with a cancellation notice. In most cases, this is because they didn’t pay their premium when it was due, but when you read the fine print, you’ll find that your policy could be cancelled for any reason – or no reason at all!
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The Legal Limitations of a Cancellation Policy
The insurance company has the right to cancel your policy for a variety of reasons, such as failure to pay premiums, cancellation by the insurer for misrepresentation of such things as age or marital status, and cancellation for noncompliance with policies or provisions of the contract.
How do Insurance Companies Cancel a Policy?
Insurance companies will typically give a 30-day notice before cancelling your policy. However, if you’re in the middle of an emergency—and your insurance company is refusing to pay for your medical expenses—it’s still possible to get coverage.
Tips to Avoid Your Policy Being Cancelled
One of the most important things you can do to avoid being cancelled is to have a clean driving record. Make sure your car is always in good working order, and obey all traffic laws. You should also maintain a low credit score, and never drive outside your insurance limits.
The Best Times to Buy an Insurance Policy
The best time to purchase is at the end of your annual policy when you are eligible for renewal, NOT when you are in need. This way, if anything does happen, you will always have insurance coverage.
The more you know about the law, the more likely it is that you will be able to negotiate with an insurance company to get what you need.