Driving without auto insurance can be risky. In fact, it’s a criminal offense and you can be charged in court as a result. Although the number of motorists that are uninsured is dropping (1 in 8 drivers was uninsured in 2014), there are still many motorists who drive without auto insurance. State laws are strict about auto insurance. States such as Texas and Nevada have passed laws and are developing ways to identify uninsured motorists and verify the insurance status of others to crackdown on drivers not obeying the law. So ask yourself: Is it really worth it?
When It Isn’t by Choice
There are many reasons drivers may not have auto insurance. But sometimes one of those reasons isn’t by choice at all.
Getting insurance is simple. All you have to do is compare auto insurance using a comparison site like CoverHound and identify which plan works best for your needs and meets your state’s requirements. After you’ve signed for the policy, make sure you don’t commit any of the following acts.
- Not paying your premium
Insurance companies are businesses. They need to make a profit to continue operating. Your insurance policy is a contract between your insurance provider and you. The insurance provider agrees to provide you with coverage in case of an accident as long as you continue to pay your premiums as stated in the contract. If you fail to fulfill your part of the agreement by paying your premiums, then the insurance company can cancel the policy.
Depending on your provider, you may have your policy cancelled the moment your premium payment is late. However, some providers will reinstate your policy if you pay the amount owed in full. The policy in such a case may have different terms when reinstated.
According to a study published in the Insurance Journal, fraudulent claims add up to over 17 percent of the injury claims in the auto insurance industry. That accounts for up to $7.7 billion paid in excess by the auto insurance industry. As such, insurance providers are very strict when it comes to fraudulent claims.
If you lie to your insurance provider in a claim that you make and are discovered, you are most likely going to be dropped by the insurance provider. This also applies for misrepresentation in application forms or any other information you present to the insurance provider. You never know what weight the answer to any question has. Be honest in all your dealings with your insurance provider.
- Poor driving record
If your driving record has been tainted, there is a chance that your insurance provider will view you as too risky to provide cover for and drop you all together. This is usually the case when you are charged with a DUI, an accident in which you are at fault, or have received too many tickets or violations.
Insurance providers become especially weary of drivers whose licenses have been suspended. Maintain a clean driving license and avoid violations as much as possible.
- Moving to another state
Are you moving to another state? You’ll have to notify your insurance company of the move. This may result in their dropping you, depending on where you’re moving. Some locations are considered riskier areas to insure in than others.
If you have been a reliable client to your insurance agency, you have nothing to worry about. But if you have committed any of the above mistakes, there’s a chance your policy will be cancelled.
Are you concerned about being dropped by your insurance provider? Be sure to shop around for the best rate and choose a reputable insurance company. You should also steer clear of the violations outlined above to keep your coverage secure.