Find out why your car insurance might be cancelled and what you should do if that happens.
It’s not something you would usually think about, but it is possible for your car insurance provider to cancel your policy. This could be for a variety of reasons, though it’s likely to be one of three: either you haven’t kept up with your premium payments, you haven’t disclosed important information, or you’ve (mistakenly, or not) committed fraud.
If your provider contacts you to say they’re cancelling your car insurance policy, don’t ignore it, even if you’re in a panic as it’s best for all concerned to get it sorted as quickly as possible.
When buying car insurance, you can choose to pay the premium either as an annual sum, or through monthly instalments. You’re legally obliged to keep up with these payments as part of the contract, and if you don’t, your insurer can cancel the policy. They won’t do this off the bat; normally they’ll send you advance warnings to give you a chance to catch up.
If payments still can’t be made, however, then they have a right to cancel. If you can see that you’re not going to make future payments, contact your provider before they have to chase you. You may have very genuine reasons for being unable to pay such as a change in your personal circumstances, for example. Being upfront will allow them to sort out an arrangement that suits you both.
It’s absolutely vital that you’re totally honest about any past claims or motoring incidents when setting up a new car insurance policy.
Failure to disclose any relevant information means that your provider won’t be able to provide you with an appropriate level of cover, and will also mean that, when they do find out information you’ve withheld (whether on purpose or not), they’ll have much better grounds on which to cancel your policy.
Non-disclosure covers three categories: innocent, careless and deliberate/reckless. It’s worth noting that all can result in your policy getting cancelled.
Under the Consumer Insurance Act, customers must take care to not misrepresent themselves when asked a direct question by an insurer.
Remember, insurers also need to be kept up to date about your circumstances (job, address), and need to know everything in your driving history, even if it’s from a long time ago.
People commit fraud for all sorts of reasons, and in car insurance terms, it’s usually done in the hope that the premium will be much lower.
For instance, parents might be tempted to put themselves down as the main policyholder on their child’s car, especially if that child is a new driver and under-25.
In the eyes of an insurance provider, that’s fraud. Any type of fraudulent behaviour is reason enough for your insurer to cancel your policy on the spot, but remember that it’s also illegal and can have far-reaching consequences.
What can you do next?
If your insurance provider has contacted you about cancelling your policy, get in touch with them straightaway. A speedy response will make it much more likely that your problem can be resolved easily.
You may discover that a genuine admin error or oversight has occurred, which may be relatively easy to fix. If the problem can’t be solved and your policy is cancelled, you must look for a new policy immediately to ensure you’re still covered.
What should you declare in future?
You must be completely honest with any future insurance providers and tell them that you’ve had a policy cancelled - and you’ll have to do this every time you get a quote for car insurance, no matter how long ago the cancellation was. This might make it more difficult to get insurance, or increase your premiums quite a bit, but the law now makes it the customer’s responsibility to be honest and careful with the info they provide.
To avoid any further cancellations in the future, keep more detailed personal records of the kind of information you need to disclose every time so you don’t miss anything out.