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What can get your car insurance canceled?

by Codrut Turcanu

So you've been shopping online for car insurance, and you've found a great rate on your new policy. But from this point on out, how do you keep that policy without it getting canceled? This is a common question with no simple answer, since all insurance companies use different criteria to underwrite a policy. Underwriting is the process by which an insurance company decides if you are an acceptable risk for them to insure--or if they should get rid of you.

A bad driving record.

Everyone knows that your driving record is the biggest single factor that a car insurance company will use to decide whether or not to cancel your policy. This includes any tickets you--or any driver on your policy--have received for speeding or other violations. Underwriters will also look at any car accidents you have had, whether or not you turned in a claim or received a ticket.

At policy renewal, your insurance company will often, but

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not always, pull a copy of your current driving record. If they do, this is the time that they may decide to cancel or nonrenew your policy.

Too many claims.

Sure, too many claims is a factor with your car insurance company. But how many claims is too many? This is a difficult question to answer, because each company looks at your claims history differently. But in general, the company will look at the size and amounts of your claims, and how close together they have occurred.

For example, if you have had three claims over the past three years, but they are small property claims, broken windshields or minor scratches repaired on the car, your policy will probably be okay. However, if those three claims were major accidents in which you caused injuries to others, and instead of three years, they all occurred in one year, you may be back online, shopping for new car insurance.

Late payments, cancellations, and

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reinstatements.

When deciding whether or not to keep you as a customer, a car insurance company will also look at the payment history on your policy. Statistically, people who have a lot of late payments also have a lot of car insurance claims, so if you always pay late, they may not want to keep you around. The next time your car insurance policy comes up for renewal, your payment history combined with other factors may mean the end of your policy with that company.

Similarly, if your policy has canceled repeatedly for nonpayment and has been reinstated, your policy could be in danger. Any time you have had lapses in coverage and the policy has had to be reinstated, the insurance company will see you as a higher risk for them to insure. The next time you pay late and allow the policy to cancel, the company may decide not to reinstate the policy.

Your history with a company.

Your car insurance company is also

going to take into consideration how long you've been with them in relation to the number of problems you've had. They are also going to take into consideration if you have any supporting business with them, such as insurance on your home, boat, or business. If you have supporting business with the same company, they are less likely to cancel your car insurance policy with just a few payment problems or claims.

There is no magic answer as to what will get your car insurance policy canceled or nonrenewed. Just remember that insurance companies need to make a profit, so they are going to follow proven procedures that weed out the highest risk customers.

About the author:

Read Quick Tips to Help you Apply for Auto Insurance Online, Find a New Insurance Company, Get Insurance Cheap, Discover Auto Insurance Quotes: http://www.My-Top-Sites.com/auto_insurance_online.html

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