Understanding Insurance Policy Cancellations in Atlanta: How a Car Accident Can Affect Your Coverage

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Insurance companies want more clients. They want more business. They often want to grow, and they want to be more profitable. So when a client is eating into their profits, they may seek to terminate the relationship with that client. 

In Georgia, as in many other states, insurance companies can cancel or decide not to renew your insurance coverage under certain circumstances, including an auto accident. The reasons and procedures for policy cancellations or non-renewals depend on the insurance company, your policy terms, and Georgia’s insurance regulations.

Know Your Policy: Review the Policy and Terms and Conditions

You enter into a contract whenever you buy or sign up for auto insurance. 

Your auto insurance policy is a contract between you and the insurance company. This contract, also known as the policy, outlines the terms and conditions of the agreement, including the coverages provided, the cost of the premiums, the policy period, and the rights and responsibilities of both parties.

The policyholder (you) agrees to pay the premiums and provide accurate information to the insurance company. In contrast, the insurance company agrees to provide coverage for specific losses and damages, as outlined in the policy. Both parties are legally bound to adhere to the terms of the contract.

It is essential to read and understand your auto insurance policy and to be aware of your rights and responsibilities and the coverage and limitations provided by the insurance company. If you have any questions or concerns regarding your policy, discussing them with your insurance agent or company is a good idea.

Insurance Contracts Often Allow Coverage Cancellation

It is common for insurance companies to include provisions in their policies that allow them to cancel or not renew coverage under certain circumstances. These provisions are generally in place to protect the insurance company from excessive risk or financial loss.

Insurance Companies Aim to Get More Clients Rather Than Cancel Policies

Insurance companies often use ads to get more customers. Having many customers is important because it helps the companies make more money and stay in business for a long time. If they start canceling people’s policies, it would hurt their business in many ways, including their reputation and money.

Insurance companies want to keep all their customers, but sometimes they might cancel a client’s policy if they think it will save them money.

Common Reasons Why Insurance Companies Will Cancel Client Policies

Because insurance companies are reluctant to cancel client policies, it becomes a significant concern when they decide to do so. Through our years of experience, we have identified several reasons behind such cancellations; these are a few instances we have observed.

Repeated Accidents in a Short Timeframe: A Growing Concern

If you’re involved in many accidents, you become less profitable for the insurance company. When this happens in a short period, they might view you as a risky and costly driver.

Major At-Fault Accidents: Impact and Consequences

It doesn’t take multiple accidents for an insurance company to reconsider your policy. Sometimes, just one major accident can be enough.

If the insurance company believes the accident wasn’t really an “accident” and instead was intentional, especially if it was expensive, they might lose trust in you as a driver.

Risky Driving Patterns

Insurance companies raise your rates after you get a traffic ticket because they see you as a bigger risk. If you have many tickets or a serious violation like a DUI, they might even drop you. Their goal is to lower their risk.

Application Lies or Mistakes

When an insurance company finds out there’s incorrect information on your policy application, it may cancel your policy immediately. Mistakes on an application can damage your ability to remain insured.

Missed Payments on Premiums

Agreeing to the policy also means paying the monthly premium. If you miss or avoid making payments, they will cancel your contract. Therefore, it’s important for you to make sure you make all of your insurance premium payments on time.

Non-Renewal: A Method Used to Cancel Insurance Policies

Insurance companies may choose not to renew a policy to effectively “cancel” a policy, particularly when the policy term is nearing its end. Not renewing is known as non-renewal. It typically occurs when an insurer no longer wants to provide coverage to a specific insured customer due to increased risk or other factors.

To keep their part of the agreement, insurance companies will let the policy finish its term. Waiting for the term to end is a common way to cancel policies for clients who’ve had many car accidents.

Ensuring proper claim handling

A car accident lawyer can ensure your claim is handled correctly by your insurance company and the other party’s insurer. In addition, they can help you avoid making statements or taking actions that could negatively impact your claim or jeopardize your coverage.

Handling policy disputes

If your insurance company is considering canceling your policy or has already done so, a lawyer can help you understand your rights and potentially challenge the cancellation. They can also assist with filing complaints or pursuing legal action if your insurer has acted unfairly or violated regulations.

What steps can I take to avoid being dropped by my insurance company after a car accident?

Report the accident promptly and accurately. Avoid any lying or covering up of the accident. Consider hiring a lawyer to challenge fault, especially if you are injured. Tell your insurance provider you will work hard to make better driving decisions if you are at fault. 

Thanks to Luisana for her kind and professional service.

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Racquel J.

Are there specific accident circumstances or types of accidents more likely to result in policy cancellation?

Accidents involving DUI/DWI. Hit-and-run accidents. Accidents involving reckless or illegal driving. Fraudulent claims. Accidents while driving without a valid license.

What is the process for policy cancellation or non-renewal, and how much notice will I receive if my policy is terminated?

The process for policy cancellation or non-renewal varies depending on the insurance company and the specific regulations in your state. Generally, insurers are required to follow specific procedures and provide adequate notice before terminating a policy.

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