When signing up for auto and home insurance coverage, you enter into a contract with your provider that will outline certain expectations for the continued provision of your coverage. A cancelled insurance policy means that your company has reason to believe that you have not been compliant with the terms of your contract.
Not only is a cancelled policy a huge inconvenience, as you will be without insurance for at least a few days while you hunt around for new coverage, many insurance companies also levy a cancellation penalty fee that covers the administrative costs associated with voiding your policy. In addition, a cancelled insurance policy looks bad on your insurance history, which may lead to higher rates. Ensure you are well aware of the terms of your policies at all times and carefully follow their parameters. Insurance companies have two means of cancelling a policy. The first is with 15 days of notice by registered mail and the second is five days of notice with the cancellation hand delivered.
Common reasons for the cancellation of an auto insurance company
- The most common reason for the cancellation of an auto insurance policy is the non-payment of premiums. Those who have failed to pay will receive a notice of an impending cancellation and asked to remit their outstanding balance. Normally companies provide about two weeks for payment. If the funds are not provided, the policy will be cancelled and you will not be able to drive until you have new coverage. If you happen to fall behind on your payments, don’t just ignore it. Call your company and explain your situation. If you are able to describe how you will make up the arrears, they will work with you to establish a payment plan to help keep your coverage active.
- Insurance cancellation can happen if you have been using your vehicle for illegal activities. This can mean everything from driving your car to a robbery and using it to transfer stolen goods to committing an act of insurance fraud such as staging a car accident or stating your vehicle was stolen when it was not.
- Lying to your car insurance company about the use of your vehicle can result in a cancelled insurance policy. For example, if you use your car for commercial purposes, such as a food delivery driver, but don’t tell your company, they have grounds to void your contract. Insurance companies also need to be made aware of any significant changes that could affect your coverage costs, such as an increase in the number of kilometres it is being driven, the addition of a driver, vehicle modifications, and if it is being operated outside of Alberta for more than six consecutive months out of the year.
- Serious driving violations like racking up several tickets, being involved in a number of at-fault accidents, or being caught for impaired driving, can be reasons an insurance company will cancel a policy. If your drivers licence has been suspended, your policy can also be cancelled.
Common reasons for the cancellation of a home insurance policy
- Carrying out illegal activities in a home are exclusions on home insurance policies that can allow a provider to cancel your insurance. Examples could be the planning of a crime, engaging in prostitution, or running a grow-op. Growing marijuana in a home is considered illegal in Canada if you have more than four plants and/or are selling the product for a profit.
- Committing insurance fraud such as setting a fire on purpose in your home in order to file a claim for damages is a serious criminal offense and will not only lead to the loss of your insurance coverage, but also charges and a fine.
- Other forms of insurance fraud, such as filing a claim for the loss of property that never existed, will also lead to the voiding of your policy and the potential of criminal charges. Always keep an up-to-date home inventory so you are able to prove to your insurance provider that your claim is valid.
- The failure to report renovations or improvements to your property is often listed as an exclusion on home insurance policies. You must keep your home insurance provider in the loop on changes you have made that have added value to your home. If should something happen, the company will then be able to provide the correct amount of funds for repairs.
- Leaving a home vacant for an extended period of time can nullify your coverage. Accidents such as pipes bursting are very common, so it’s imperative that you have a competent person enter your home at least once a day in order for your home insurance to remain valid. Often insurance companies only allow for four days of absence before someone needs to come by.
Get great advice and low rates at Lane’s Insurance
If you need insurance advice, or if you’re thinking about changing insurance providers, the caring and knowledgeable brokers at Lane’s Insurance are a great resource. Lane’s Insurance is a full-service Alberta-based brokerage, offering competitive home insurance rates in Calgary. We offer excellent claims support and outstanding customer service. Contact us at our Calgary, Edmonton, Banff, and Alberta offices today.