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Surviving an auto insurance policy cancelation

Your insurance company may cancel your policy for late payment, many times with minimal notification, so make sure you won't miss an installment. If you can pay the premium up front, it may simplify the process and save you a few dollars. Your policy will no longer be in effect on the date that the notice specifies. Either you or your insurance company can start the process of non-renewal.

 

Other steps after being canceled by your insurance company

 

points  Contact your auto insurance company for an explanation.

points  Get a copy of your driving record or other document that supports their finding.

points  Contact your state Department of Insurance and file a complaint.

points Shop around for the lowest priced auto insurance from highly rated carriers.

 

If your car insurance is cancelled by your car insurance company and your policy has been in effect for over 60 days, there are other reasons for this:

 

 Your insurance company believes you lied in relation to a claim.

 Your driver's license has been revoked or suspended.

 You committed fraud on the application.

points A severe infraction on your driving record, like DUI or evasion.

 

Auto insurance policy cancelation terms you should know

Cancellation: Termination of an insurance policy / contract before the end of the policy period, by the insured or insurer.

 

Flat Rate Cancellation: Termination of an insurance contract at inception. This policy is never in effect.

 

Lapse in Coverage: A point in time when a policy has been canceled or terminated for failure to pay the premium, or when the policy contract is void for other reasons.

 

No-Loss Form: A statement that is a signed form telling the insurance company there have not been any losses since a certain date. The document usually includes a cancellation date, expiration date, and reinstatement date. etc.

 

Policy Lapse: A point in time when a policy has been canceled or terminated for failure to pay the premium, or when the policy contract is void for other reasons.

 

Pro Rata Cancellation: Termination of an insurance contract before the policy expiration date on which the premium returned to the insured person is adjusted in proportion to the amount of time the policy was in effect.

 

Reinstatement: The restoring of a cancelled policy to full force and effect. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest. They may also require a signed no-loss form.

 

Short Rate Cancellation: A policy termination in which the refunded premium is not proportional to the amount of time remaining in the policy period due to the fixed expenses incurred by the company. The insured will generally pay more for each day of coverage than if the policy had remained in force throughout the entire policy period.

 

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