Imagine the shock of filing an auto insurance claim only to find that your policy has been voided. It’s an expensive scenario that happens a lot more often than you’d think.
Understanding the mistakes that can lead to a cancelled insurance policy is the best way to guarantee you never find yourself in this situation.
1. Not making your payments
Auto insurance doesn’t work like a utility bill where you get several warnings and 6 months leeway before your electricity shuts off. You can’t catch up with back payments by paying a penalty with insurance. Stop making payments and your policy will be annulled.
Every policy will list a designated grace period, a time frame where you can be late with your payment and still be covered. Once the grace period is over, so is your coverage.
If you hit difficult times financially and know that you’ll miss several payments, call your insurance provider or broker immediately. Often, they will make changes to the policy to lower premiums or set up a payment plan to help you avoid having a gap in coverage.
2. Giving incorrect information
As tempting as it might be to fudge the numbers in hopes of a lower premium, don’t.
From the distance you live from work to the number of drivers registered to drive the car and basic information like make, model and mileage, giving false information can lead to a cancellation of coverage. More serious problems such as omitting a criminal record or failing to disclose your use of the vehicle in a driving-heavy business will almost definitely void coverage.
3. Making modifications to your vehicle
From adding fancy rims to installing a lift kit, always notify your insurer when making major changes to your vehicle. Certain modifications can increase your risk level and failing to update your policy can lead to unpaid claims should you have an accident.
4. Parking on the street
Many insurance providers will ask if your car will be parked in a garage when at home and offer a discount for keeping your vehicle in a safe place. If you say yes, and then park the car on the street in front of your house, it’s possible you won’t be covered for damages.
If need help or have questions about auto insurance, contact the experts at John B Wright Insurance.
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