When an individual purchases an auto insurance policy, it is a contract in which both parties need to agree to specific terms in order for the policy to remain valid. If these requirements are not met, a driver can be faced with their insurance company cancelling their policy. Below, we will discuss under what circumstances an auto insurance policy can be cancelled.
What Reasons Can Insurance Be Cancelled?
As auto insurance is government regulated, there are only specific circumstances under which an insurance provider can cancel your coverage.
The most common reason is for non-payment. If you happen to skip a payment on your policy, you will be sent a registered letter which will advise you the number of days (usually 15) you have to pay the outstanding balance. If the payment is not made, your policy can be cancelled. As having auto insurance in Alberta is the law, if your policy has been cancelled for non-payment, you will be unable to drive your vehicle until you obtain new coverage.
Furthermore, if you have an outstanding balance owing on auto insurance, it must be paid in full before a new insurance provider will offer a payment plan for your policy. If your arrears have not been paid, you will be asked to pay upfront the entire cost of your new policy in full.
If a situation arises that may cause you to be late making your auto insurance payment, it is best to notify your insurance company up front. This can help prevent a non-payment cancellation and ensure that your coverage still remains.
If a driver is not truthful when they apply for auto insurance and their insurer finds out, they may be faced with having their policy voided. Circumstances which may be considered non-disclosure or misrepresentation may include not advising your insurance provider that you use your private passenger vehicle commercially (delivering take-out or being an Uber driver) or not listing additional drivers that use your vehicle regularly.
Committing insurance fraud can result in your policy potentially being cancelled. Fraud can be considered filing fraudulent claims, lying about how a loss occurred etc.
Being upfront and honest to your insurance provider is always the best policy. Paying your premiums on time will also ensure that you have the coverage you need in the event of an unfortunate loss, which could be financially devastating.
To learn more about how you can get the best rate for your auto insurance, contact one of our knowledgeable insurance professionals today.