Can My Insurance Company Drop Me?
Here at Wittenstein & Wittenstein, rarely does a day go by without somebody asking us if their insurance company can drop them. People pay for insurance, but are afraid to use it for fear of being dropped. That’s why we thought it would be helpful to address this, and the related issue of when an insurance company can raise your rates.
When Can My Insurance Company Drop Me?
An insurance company can drop you whenever they’d like to, and no reason is required. Most of the time however, insurance companies like to keep their customers. So they’re not likely to drop you unless it starts to look like they’ll have to pay out a lot more than what they collect from you. Insurance companies can do this through cancellation or non-renewal.
Cancellation is when an insurance company stops covering you during the term of your contract. This typically occurs if you’ve violated the terms of agreement in one of the following ways:
1. You fail to report an accident or violate other policy provisions
2. It is discovered that you’ve been rate-jumping
3. Your premiums are not up to date.
A company cannot cancel your policy during the term of your contract just because you’ve been involved in one or more accidents (even if they were within a short time frame). They must continue to insure you until the next renewal period.
Non-renewal is when a company decides to not renew your coverage after your policy period has come to an end. Insurance contracts typically are renewed yearly. Your company will be glad to renew your policy, and if there have been claims, they usually just increase your rates. Insurance companies won’t want to drop you (not allow you to renew) unless insuring you has become substantially more risky in their eyes.
What Might Make Me More Risky?
Even if you’ve had multiple accidents that were clearly not your fault (as in the case of rear-end accidents) an insurance company may still find this alarming. This applies to anybody driving your car, whether or not they are listed on the policy.
Too many at-fault accidents
Being involved in two more accidents within a three year period is considered to be a too many.
Reports of DWI/DUI
Once is too many times. Most companies will drop you for a DUI, even if it did not result in an accident.
Bad driving record
Aside from resulting in multiple fees and possible license revocation, multiple traffic violations can increase your possibility of being dropped by your insurance company. Traffic violations include, but are not limited to, red light violations, failing to yield or stop at a stop sign.
What you Can Do To Avoid Being Dropped and Save Money on Insurance Rates:
Defensive driving certificate
Completing a six hour defensive driving course once every three years can decrease your rates. These courses are offered in multiple locations in-person and online.
Pay your bills on time
Paying your car insurance late can result in a lapse of coverage. Making that a priority every month can save you money throughout the year.
Driving safely not only keeps you and others sharing the road with you safe, but it also decreases the likelihood of growing a bad driving record. Erring on the side of caution in times of inclement weather or around construction sites and schools will keep the cops away.
Installing Safety & Anti-theft Features
While many safety features automatically come with your car upon purchase, products like dash cams usually don’t. Some companies provide discounts for using a dash cam.
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