Insured individuals consider themselves to be clients of their Insurance Company. It is the right assessment. But, insurance companies are a little different than other business entities. They focus on what risks their clients are going to create for them. As such they tend to take more control of the client, and they are the ones that make the final decision. The decision in regards to whether they are going to take a driver on as a client. With this approach to insurance, it sets the insurance company in control. They can decide whether they want to ensure someone or not. They can also choose whether they want to keep them as a client in the future.
Can the Insurance Company Cancel My Insurance?
The short answer to this is yes, insurance companies do have the right to who they want to take on as clients. But, the in the insurance industry is a competitive business. Insurance companies are not going to drop clients that they work hard to get. There has to be what they consider as a valid reason for doing so which there can be several of.
Meeting Payment Responsibilities
An insurance company will determine how much the insurance is going to cost the driver. It will be for a specific period. In most cases, insurance policies will run for a one year period and then will be up for renewal. There can be some variations to this. Once the premiums are determined then how they are paid is agreed upon. Insurance companies will offer different ways of payment. Some will insist on full payment for the year. But there are many others at that will allow payment plans. Some will allow monthly payments were others may go for quarterly instalments. No matter what the payment terms are the insured has to make their payments on time. The insurance company will issue an invoice in plenty of time. It is to give the driver notice that their insurance payment is coming due.
There are a variety of different ways that the insurance is paid. One of the simple ways is to set up for an automatic withdrawal when the insurance is due. But, the insured must make sure that the funds are in the bank to be able to cover this. Otherwise, it will be non-sufficient funds. Which means that the insurance company is not paid and this will go against the driver in a negative way. Insurance companies do not take kindly to not having the payments made on time and in the proper amounts.
The insurance company will notify the driver when nonpayment exists. The driver will have a specific amount of time to catch the payment up. Otherwise, the insurance is cancelled. Most insurance companies are lenient with late payments or for nonpayment on one or two occasions. But if this becomes a habit, it could mean that the insurance company could cancel the insurance. Or at the least to not renew the policy when it becomes due.
No Reasons Given
The insurance company is selling a product. They can decide at any given time not to sell their insurance products to a particular individual. They can choose not to give a reason for doing this. Yet, most do not follow that policy.
There are some individuals that make the mistake of not giving accurate information. That they provide to their insurance providers. They may give a false address thinking that they will get a better rate on their insurance. Or they could falsify other types of information. Often the Insurance Companies detect this. Then the insurance company will most likely cancel. It is because some of the metrics used are from the information given is what helps to set the policy price. If the information is false, then they are not able to set an accurate premium. This can mean a loss of money for the insurance company.
Bad Driving Record
In most cases the insurance company checks of the driving record when they are going to take on a new client. They may not check this record until the policy is up for renewal. But, there are no hard and fast rules about this. An insurance company could discover that a client of theirs is beginning to develop a bad driving record. If this comes to their attention then rather than run a risk, they will cancel the insurance. Insurance companies make their money based on good clients that don’t present claims.
There can be issues when there are too many claims. It is one of the common reasons that an insurance company will cancel insurance. A valid claim is not going to cause this type of reaction. But, it will most likely affect the premium increase. Multiple claims can mean that the insurance company is going to cancel the policy as quick as they can.
Filing a Complaint
Some individual feels that they have had their insurance unfairly cancelled. There are a few things they can do about this. They can try and solve the issue with the insurance company themselves. Sometimes this doesn’t work. Then they can take their case to the financial services commision of Ontario. To have the issue reviewed. But in most cases, insurance companies only cancel insurance for valid reasons.
Becoming a High Risk for Insurance
It can be challenging to get new insurance. If an insurance company has fired the individual.
They are now classed as high-risk clients. It doesn’t make it impossible. But it makes it a lot more expensive. There are insurance companies that specialize in high-risk insurance. The insurance premiums are going to be much higher. How much higher will depend on the circumstances. Those that have put the driver in the high-risk situation. Many claims are going to be a major issue. But also will nonpayment. Insurance companies want their money and nonpayers creates a high risk for them. As a result, high-risk insurance clients are going to pay the price.