The Most Common Reasons Why Car Insurance Companies Cancel Policies

Eufemia Didonato

Compare-autoinsurance.org has launched a new blog post that explains why car insurance companies might void policies.

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Car insurance companies are businesses that deal with risks. Insurers survive as a business by being able to assess risk and avoid losses. To avoid losing money from various reasons, insurance companies are canceling their customers’ policies that present a risk.


The main reasons why car insurance companies are canceling policies are the following:


  • Breaking the terms of the policy. Drivers that violate the terms of their policies will likely get questioned by their insurers. For example, using a personal vehicle in commercial activities will break the terms of a personal car insurance policy and the insurer will likely void the policy.
  • Committing fraud or lying to the insurer. Drivers that are shopping for insurance or are making claims should always provide truthful information. If they are discrepancies in the provided information, then the insurer will not only void a policy but on some occasions, the insurer can deny an otherwise valid claim. Drivers should do their best to provide only honest information to their insurers. Important information like the number of drivers in the household, primary drivers of specific vehicles, and annual mileage should be reported with honesty, otherwise, the insurer might void the policy.
  • Driving badly and filing too many claims. Drivers that have serious traffic violations that are penalized by adding points to the license or even by losing the license can be in danger of losing their policies. If an insurer believes a customer poses a great risk, then they won’t hesitate to cancel the policy. Drivers that make too many claims, especially if they were at-fault drivers in many incidents, will also face the possibility of having their policies canceled by their insurers.
  • Not paying the premiums. This one is quite obvious. If a driver doesn’t pay his policy, then logically his insurers will cancel the policy. Drivers that are consistently late on paying their premiums can also get their policies voided.


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