There are several different reasons why insurance may be cancelled. One is for non-payment or missed payments. This can be a serious situation when it comes to your car insurance.
What Happens If My Car Insurance Is Cancelled Due To Non Payment?
Your insurance coverage is cancelled.
If you have not paid your insurance premiums by their due date then you run the risk of getting your vehicle insurance cancelled. Although there may be a grace period if your payment is late. If you know that you are going to be late with your insurance payment you can call your insurance provider to see if there is a grace period or if something can be worked out.
Some insurance companies will be lenient with one late payment, but beyond that, they will usually cancel your insurance for non-payment.
Cancellation And Non-Renewal
There can be some confusion between the cancellation of vehicle insurance and non-renewal. In either case, you should receive a letter from your insurance company that will clearly state which it is.
This will come when it’s time to renew your insurance and the insurance company is declining to renew your current policy. It should state the reason why.
This will come when the policy is still in effect and is not up for renewal. It will give the specific date as to when your insurance is void.
How Long Does Non Payment Stay On Insurance?
If you have had your insurance cancelled because of non-payment it will stay on your Insurance record for a period of three years. However, the insurance record goes back much further than that. An insurance company could go back six years or more. If they do and there is a record of cancellation of insurance for non-payment then this could influence the premiums that are going to be set.
Some insurance companies could keep high-risk rates longer than three years. It is up to the insurance company to set its rates.
Can I Get Car Insurance If My Policy Was Cancelled?
You may even be able to get insurance from the same company that originally cancelled your policy. However, this is not too likely. If they were to insure you then you would be insured as a high risk insured. Which would mean that the premiums would be much higher. A more likely possibility would be to be insured by an Insurance company that specializes in high-insurance. Which again means you would be paying higher premiums.
In some cases just having one non-payment with your insurance company will be enough for them to cancel your insurance. However, it does not automatically place you in the high-risk category. In many cases, it takes more than one occurrence of this before the majority of insurance companies will now consider you to be high risk.
In addition to having the insurance cancelled and higher premiums as a result of this some of the other repercussions are:
- Fewer choices of insurance companies that will offer insurance
- Few options for payment plans. Some insurance companies may demand the entire year’s premiums be paid instead of offering installment payments.
- It could affect your credit score which is going to affect other financial areas in your life.
How Do I Get Insurance After Being Cancelled?
Shop around for a new Insurance Company.
You will now be faced with the task of shopping for a new insurance provider. There are a couple of ways you can do this.
You can call Insurance companies at random and ask for a quote.
This can be really time-consuming and can sort of be looking for a needle in a haystack. There are tons of insurance companies listed on the internet. But, they are intermingled with ones that serve Canadian clients and ones who only serve those driving in the United States.
You can go through an Insurance broker
Insurance brokers partner up with a small group of insurance providers. They will choose the one that best suits your needs for the insurance you are looking for.
You can use one of the services online that provide insurance quote services.
These quote services work similarly to a broker except often they affiliate with many more insurance providers and will get several quotes which they will present you with to allow you to choose which company offering the quotes appeals to you the most.
Getting Car Insurance After Cancellation Ontario
Ontario like every other province has insurance rules. These are governed by the Insurance Bureau of Canada. The Insurance companies in Ontario basically follow the same format as every other insurance provider across Canada. Therefore when it comes to cancellation for non-payment they will basically follow the same format of cancelling the insurance which results in the individual having to apply for high-risk insurance.
Many people don’t realize that there is such a thing as an insurance record. Or, they get this confused with the drivers record. They are two completely different reports.
This is the company that provides Insurance Record reports to the various insurance companies. It is called the AutoPlus report.
This report contains information such as:
- Your current insurance coverage
- Insurance claims
- The type of claim
- How much was paid out on the claim
- The percent of collision fault if assigned
- Third-party claims
- Policy cancellations and the reasons
The time frame in which these information covers is over twenty-years. However, it is believed that the majority of insurance companies only rely on the data collected for the last three years.
Don’t Lie When Getting Quotes
With all the information that is available to Insurance companies most likely if an applicant is less than truthful it will be discovered during the information gathering process. Which is done when determining the premiums. There are times when a lie may go undetected for a period of time. What could happen is if a claim is put into the Insurance company and the lie is detected the claim could be void. A very costly mistake.
How To Keep High-Risk Insurance Reasonable?
There is no doubt that high-risk insurance is going to cost a lot more. If a good payment record is maintained for three years there is a much better chance of getting the insurance premiums down to the regular rate. At the same time, the overall cost of vehicle insurance of the high-risk insurance can be kept into the lower categories by:
- Maintaining an impeccable driving record
- Purchasing a car that has a record for being cheaper to insure
- Taking advantage of any of the discounts that may be applicable
- Making sure that all payments are made on time.
It is no fun having to pay high-risk premiums and every step should be taken to avoid ending up in this situation.