Anyone with car insurance may one day find themself in a situation which their auto insurance company cancels their policy, or their policy is not renewed.
Valid reasons for cancellation
As you should be aware, each province has certain reasons that a car insurance company can cancel a policy, after the binding period (the first 60 days in most provinces but can only 30 or up to 90 in some provinces). During the binding period (sometimes called “underwriting” period), the company can cancel your policy for nearly any reason since this is the time it has to look at you as a risk (verify the information you’ve given it) and determine if it wants to issue you a policy.
Reasons for cancellation after the binding period vary by company but typically include items such as:
- Nonpayment of premium
- Fraud or material misrepresentation
- Violation of terms and conditions of the policy
- Failure to disclose fully your motor vehicle accidents and moving traffic violations for the preceding 36 months (if called for in the application)
- Anyone insured on the policy made a false or fraudulent claim or knowingly helped someone else make a false or fraudulent claim
Other reasons for cancellation may exist:
- If there exists an issue or matter related to the risk that constitutes a threat to public safety.
- If there is a change in the condition of the risk that results in an increase in the hazard insured against.
- If the driver’s license or motor vehicle registration of the named insured or any covered driver is suspended or revoked related to their driving record.
- If you have filed two or more claims or accidents that you caused or were considered at-fault for within a three-year period.
- If you have filed three or more not-at-fault claims within a three-year period.