Can Car Insurance Deny Coverage to Me?
Last Updated on September 30, 2020
Car insurance companies can deny coverage to drivers. A car insurance company is not legally required to provide its services to you. Most car insurance companies reserve the right to cancel a policy within the first 30 to 60 days. All car insurance companies have the right to deny coverage to you for certain reasons.
Why did a car insurance company deny coverage to you? What are the most common reasons for being denied car insurance? What can you do if a car insurance company refuses to cover you? Today, we’re answering all your questions about being denied for car insurance.
Reasons for Being Refused Car Insurance
Being denied car insurance coverage can be frustrating. Fortunately, we want to help. Today, we’re explaining some of the reasons you may be refused car insurance coverage – including what to do if you keep getting denied for car insurance.
Top 5 Most Common Reasons Why Car Insurance is Denied
The most common reasons why car insurance is denied include:
- You provided false information on your application, including incorrect driving history info or personal information
- You have a DUI or DWI on your record (or multiple convictions)
- You have too many accidents, claims, tickets, or traffic violations on your record
- You submitted a fraudulent car insurance claim
- You have a history of missing premium payments
If you’re a high-risk driver, or if you have a history of missing payments, then you may be denied car insurance coverage. Car insurance companies prefer having a mix of high-risk and low-risk drivers in their pool of customers. However, certain drivers are considered too high of a risk. If you’re considered too high of a risk, then major car insurance companies may deny coverage. You might be forced to buy car insurance from a specialized high-risk provider.
Other Reasons for Being Denied Coverage
The reasons listed above are some of the most common reasons why drivers would be denied coverage. However, some drivers are denied coverage even though they don’t meet any of the above conditions. If you’re a low-risk driver who always pays your bills on time, then why would you be denied coverage?
Here are some alternative reasons why an otherwise good driver might be denied coverage:
- You live in an area with high crime; car insurance companies will use your ZIP code to determine how much to charge you for comprehensive coverage, and if you live in an area with high rates of theft, vandalism, and other crime, then you may be denied coverage
- You have a high-performance or ultra high-end vehicle that has a particularly high likelihood of being stolen
- You have limited driving history; you have never driven before; you don’t have any record of previously being insured
It’s Illegal to Deny Car Insurance Coverage for Certain Reasons
Different states have different laws on car insurance. Generally speaking, however, you cannot be denied car insurance for the following reasons:
Some states take things a step further: some states prevent you from being denied car insurance for your driving history, for example. Other states prevent car insurance companies from denying coverage due to your credit score.
If you believe you have been denied car insurance coverage for one of the reasons above, then your car insurance company might be violating the law. Contact your state insurance commissioner’s office to file a complaint.
Your Current Insurance Company Might Cancel your Coverage
In some cases, you’re able to get car insurance, but that car insurance gets canceled by your insurance company. Your insurance company might tell you that they don’t plan on renewing your policy, for example, when it’s time for renewal.
Your car insurance company can cancel your policy. They’re fully within their rights to cancel your coverage if they find you violated the terms of your contract. Most insurance companies, however, will wait until your insurance policy is up for renewal, at which point they’ll tell you that they won’t renew it.
If your car insurance company cancels your policy, then this has an impact on your insurance record. It stays on your insurance record for five years.
If your insurance policy gets canceled three times in one year, then it will make you look like a particularly high-risk driver and you’ll have trouble getting coverage from any car insurance company.
Generally, an insurance company can cancel your policy within the first 30 to 60 days. They might cancel your policy for the following reasons:
- Fraud (lying on your application or misrepresenting information)
- Not paying on time or at all
- A suspended driver’s license, DUI, or other violation
If your insurance company cancels your policy for any of the above reasons, then you may be considered a high-risk insurance driver. If your insurance company simply fails to renew your policy, however, then you shouldn’t have much trouble getting new car insurance.
What Can I Do If Nobody Will Insure Me?
If you’re a high-risk driver, then you might continue getting denied by major insurance companies. If you cannot get a car insurance quote, but you still need to drive, then you have one final option: work with a high-risk car insurance company.
A high-risk car insurance company – like The General, for example – specializes in insuring high-risk drivers.
Typically, these companies charge rates that are 300% to 500% higher than the average car insurance policy. For many high-risk drivers, however, this is their only option.
Fortunately, you can compare quotes from multiple high-risk providers to significantly reduce your car insurance costs. You can also take advantage of various car insurance discounts.
High-Risk Car Insurance Status Does Not Last Forever
You may be considered a high-risk driver today. However, your high-risk status won’t last forever. If you maintain a safe driving record and avoid making claims, then your car insurance prices will gradually decline over time. Eventually, you’ll be paying the same car insurance prices as everyone else – assuming you continue to drive safely.