What to Do When an Insurance Company Drops You?by Peter Drea
When you're dropped from your auto policy, the experience can be disconcerting. If you drive without insurance, your license and registration can be suspended, and you’ll have court fees to pay. In case a policy covers several members of the family, all members all be affected. To get new insurance, you’ll have to pay higher premiums, as you’re deemed a high risk to insure. Knowing what to do in such situations can be helpful.
Appeal or Find a New Insurer
Sometimes a letter to advise that you’ve been dropped by your insurance company is just a formality, and you can appeal the decision. Visit the closest office of your insurance company and talk to a person who can listen to your concerns. If your insurance company declines your reconsideration, try a new policy with a different insurer. To do this:
- Take your time and get quotes from different companies until you get a policy that fits your budget and needs.
- Provide truthful information as to why you were dismissed from your old insurance company. Your claims history is stored in a central database, and the new insurer can confirm the details.
- Inform all of your lien holders about the new policy as soon as possible, as they can repossess the vehicle for breach of contract -- or not insuring your car after issuing you a notice.
If your car is on loan, some banks or companies can impose their insurance, which is added to your monthly installments. Though costly, this option avoids you being banned from the roads for lacking indemnity.
Surrender Your Registration and Plates
If you don't need another policy immediately, or simply can’t afford one at the higher premiums, you can temporarily turn in your registration and license plates to your state's motor vehicles agency. If you do so, you’ll stop receiving penalties for having an uninsured vehicle.
- In some states, if you return registration and license plates to your state's motor vehicles agency, you can’t park on any public road -- or your car will be impounded and a fine imposed.
- When you decide to insure your car later, you’ll still be subjected to inflated monthly premiums until accidents and tickets drop from your recent records.
Consult an Attorney
If you’re dropped from your insurance for refusing to pay higher rates, you can:
- consult your attorney for legal advice. Remember to carry with you the letter of acceptance issued by your insurance company, as it's the proof of contract between you and the company.
- Ask if it is possible to reinstate your insurance through a legal process. At least this will allow you to drive and park on any public road in the meantime.
Improve Your Driving Habits
Review your claims history after you're dropped; ask for a free copy of your C.L.U.E. report from LexisNexis. In most cases, you'll find that policy cancellation is due to violation of the terms and condition of the contract.
- Take a bus to work occasionally to reduce the amount of time you drive your vehicle.
- Always be truthful about your driving record when applying for car insurance.
- Pay your premiums on time.
- link LexisNexis: FACT Act Disclosure
- link Department of Motor Vehicles: Return or Turn In (Surrender) Plates to the DMV
- link Illinois Department of Insurance: If Your Automobile Insurance Policy Is Canceled
- link Legal Match: Cancellation Of An Auto Insurance Policy By An Insurance Company - See more at: http://www.legalmatch.com/law-library/article/cancellation-of-an-auto-insurance-policy-by-an-insurance-company.
- link Insurance Hotline: Demerit Points, How They Work, How They Affect Insurance.
- link DMV.org: Types of Utah License Plates.