What circumstances would prompt an insurance company to cancel a car insurance policy only one month in?

Question

And by email! Company is Budget. No claims have been made and policy paid in full.

Answer 1

Basically any reason the insurance company wouldn't have written you in the first place. Depending on what state you are in insurance companies have that right, within a certain time frame after the policy is written. After that it becomes much harder.

Answer 2

Typically, an insurance carrier has 30-60 days to "underwrite" you coverage. During this time, they run all sorts of reports on you to see if they can determine how good or bad of a "risk" that you will become.

They will look at your household for undisclosed drivers, they will look at your driving record for undisclosed violations and they will look at what's called a CLUE Report (Comprehensive Loss Underwriting Exchange - devised by ChoicePoint - one of the large data management companies out there) to see if you have any undisclosed accidents.

Another reason you may have been can celled is perhaps your check didn't clear your bank. If this happens, the insurance company can act as if the application never happened.

It is better to have them find this out NOW than later. Some "unscrupulous" companies underwrite "at time of loss" and try to deny the claim stating "material misrepresentation" (in other words, you falsified/lied on your application.)

So, in short, call your agent and ask them WHY you are being canceled. They should be able to tell you and if they can't, I am sure that there are a LOT more agencies to choose from in your area. Just look for the PIA or Big I (Trusted Choice) logos and you will find a professional agent there that can help you.

Good luck and I hope this helps!

Answer 3

Assuming that you have made a full disclosure of material facts and have provided proof of no claims bonus......

The obvious thought is that Budget have done a mis-quote and are now trying to cut their losses.

I would certainly put in a complaint asking why the policy is being cancelled and that in your opinion the company are not 'treating you fairly'. (Read the FSA website about TCF - you may have Budget over a barrel with this)

I assume you will have 7 days to re-arrange your insurance. I would certainly take this all the way to the FOS to fiand out what is happening. (remember earlier this year Hastings cancelled 3,500 policies due to giving misquotes.

Answer 4

OK ill correct this myself!!!!!

budget do not exist apart from the call centre,i know this cos i used to work for them on the retail side
if u did all your cover on line then u may have answered things incorrect and when u have received the proposal form u filled it out as it should,no doubt they would have sent u letter after letter,which in this case would have been recorded Del!
if they don't get a responce from u in the designated 7days then they will write to u again for u to get in touch and if u refuse to contact then this is what would happen to Ur policy,they will refund any difference in premium apart from the time u was on cover!!

there would be no need to go to the fsa as BUDGET are in there own RIGHT to cancel the policy if u haven't been in touch,contact them try to discuss the matter with them.

Answer 5

Only things that I can think of now are Non payment (No) Claim(No) or non disclosure on the application. They are then bound by law to give you back your money less any time that you have been covered

If you have paid on line by credit card and you get no joy from them try contacting card company as you will be covered up to 90 days

Debit card a bit different try contacting the bank to see if thae operate a similar cover
Good luck

Answer 6

You should be able to cancel it but you need to read the small print. I recently had my car written off and when I phoned to cancel it, the broker said I couldn't until the insurance company had notified them that the claim was completed. By the time that had happened I had had the policy for nine months and the small print said that after nine months, the policy could not be cancelled. They make me so mad.

Answer 7

Premium check/payment bounced.
A material misrepresentation was found on the insurance application.

Answer 8

Change of address. Discovery that the questionnaire was completed dishonestly. Convictions. Taking out more than one insurance (illegal)

Answer 9

The usual reason is that they've discovered you told lies. Failing that, it's a c ock-up. What did they say when you asked them?

Answer 10

THEY FOUND OUT SOME ADDITIONAL INFORMATION THAT WAS A NEGATIVE ON YOUR SIDE AND THEY DECIDED THAT YOU ARE A HIGH RISK.

CONTACT THEM AND ASK OR CONTACT THE BOARD OF INSURANCE.