TERMINATION OF AUTOMOBILE INSURANCE
Automobile insurance companies may refuse to renew an insurance policy or even cancel a policy in the middle of a policy period. The key term used by auto insurance carriers in the State of California are renewal and cancellation. Non-renewal occurs when your insurance carrier decides to part ways with you at the end of a policy term. The reasons for such non-renewal may be that you are a high risk driver or have made a number of claims during the policy period. Cancellation is different and usually occurs before the end of the coverage period, based upon similar grounds. Typically, the grounds for cancellation of an insurance policy include the following:
- Revocation/Suspension of driver’s license;
- Non-payment of premiums;
- Failure to register the vehicle;
- Fraud/presenting a fraudulent claim.
If the insurance carrier attempts to cancel an insurance policy during the mid-term of said policy, it would typically be for issues such as non-payment of premiums, or some form of “material misrepresentation,” in the obtaining of the insurance policy.
Cancellation of auto insurance in California typically requires written notice prior to the policy being terminated. The agreement to provide insurance in California is a contract between yourself and the insurance carrier to provide for the insurance coverage. Generally, the insurance policy itself must specify the grounds, the time frame, and the manner of cancellation.
In California, whether termination of an insurance policy is for non-renewal or cancellation, the insurer must provide written notice. If the issue is non-renewal, the insurance carrier must provide at least thirty (30) days’ notice before the end of the policy period, or twenty (20) days prior to the expiration of the policy, if the reason is non-payment of premiums. More significantly is an effort or attempt by the insurance carrier to cancel the vehicle insurance. Again, cancellation would typically be based on grounds of fraud, misrepresentation, suspension of revocation of the driver’s license, DUI conviction, multiple accidents or moving violations, or even non-payment of premiums. Under these types of circumstances, the insurer must deliver a cancellation notice of at least ten (10) days prior to the effective date (if for non-payment of premiums), and at least twenty (20) days prior to cancellation for the other reasons. If your insurance carrier cancelled your insurance mid-term, expect a refund of any unused premiums that have been paid!
The State of California has more laws than most states to protect the consumer, particularly in the areas of insurance for auto, home, or health. For the most part, neither non-renewal nor cancellation of an insurance policy can occur without notice and the opportunity to cure or correct the problem.
If you have questions regarding your insurance claims of any nature, the attorneys at Heiting & Irwin are available for a free initial consultation regarding your rights.