If you pay your monthly premiums and file correctly, your insurance company has a duty to protect and compensate you for the losses that your policy contract covers. However, there are a variety of different reasons why your insurance policies may be canceled before the expiration date.
So, when can insurance cancel your policy? Read on to learn about the reasons for insurance cancellations and how a bad-faith insurance lawyer can help you pursue the compensation you may be owed.
Keep in mind that cancellation isn’t the only reason why your insurance coverage may end. Insurance policies have expiration dates, and non-renewal could lead to denied claims.
Just like your insurer is expected to compensate you for a loss, you're expected to tell them the truth. When you sign up for insurance, the company will ask about details like your age, where you live, and whether you’ve been in accidents before. These are all important questions that will help them assess your situation and determine the risks involved in protecting you.
That’s why providing the wrong information, even by mistake, can make your insurer cancel your policy, especially if the correct information would have discouraged them from approving your policy in the first place. Material misrepresentation on insurance policies is a common cause of cancellations.
Premiums are the payments you make to the insurance company in exchange for the protection they give you. It’s an important part of your agreement. Non-payment of premiums at the due date can lead your insurer to cancel your policy, sometimes without a written notice.
Your insurance policy can also help you compensate a third party if you unintentionally harm them during your policy period. For example, if you have an auto insurance policy and accidentally hit someone with your insured vehicle, your insurers may cover the compensation you owe the person.
However, if your insurance agent discovers that harm was intentional, this can cause them to cancel your policy before the expiration date and prevent you from extending your insurance coverage for longer.
A health insurance policy helps you take care of your medical payments when you’re sick, including consultation fees and the cost of medicine. However, if you get very ill, your insurer may cancel your policy, especially if the type of illness and medical payments required were not included in your policy. To learn whether your policy was wrongfully canceled, you should consult with a bad faith attorney.
In an auto insurance policy, you have to provide information about your car’s specifications and how you use it. If you start using your insured vehicle for work, like an Uber driver or a delivery driver, you’ll use your car a lot more than normal.
If this happens, you have to inform your insurer about this development and let them weigh the risks involved in protecting you. If you fail to inform them and they find out, they can decide not to bear the additional risk and terminate your auto policy, sometimes without a written notice.
One of the reasons for insurance cancellations is that you fail to take care of the thing you’ve insured. For example, your homeowner’s insurance policy may be canceled if the insurance company investigates the claim and discovers that you could have prevented the loss.
For example, let’s say you're aware there is a leak in your roof and you fail to fix it. Eventually, the leak may get worse and cause a lot of damage to your property. If your insurance company is not satisfied that you did your part to protect your house and prevent any damage, they can terminate your agreement before the cancellation date.
Can insurance cancel your policy? It all depends on the circumstances and factors involved. If you’ve had your policy for more than 60 days, or you have a renewal policy, there are only certain cases in which your insurance policy can be canceled.
While there are valid reasons for insurance cancellations, some insurers do so out of bad faith and refuse to compensate the policyholder without any justification or cancellation notice.
