Car insurance cancelled - who will insure me?

Car Insurance Cancelled – Who Will Insure Me?

If your car insurance gets cancelled, this is generally a pretty stressful situation. You may feel that this is the end of the road. Well, let's hold it right there – the truth is, this is not the end of the road. You do have options available to you. Basically, you should be able to find someone to insure you.

But there will be a few things to bear in mind when you search for insurance after a cancellation. Read on as we explore this in our guide.

Why Car Insurance Policies Get Cancelled

Why would a car insurance provider cancel your policy anyway? A car insurance contract is legally binding, so your insurance provider probably won't be able to just cancel it for no reason. Instead, there will usually be some underlying factor involved that voids your car insurance – and it's this underlying factor that can make finding a new policy difficult. As a rule of thumb, if you haven't paid your premiums, or if you have omitted or changed any information that could affect the cost of your policy, the insurance provider may decide to cancel it. Take a look at these reasons in more detail below:

Car Insurance Cancelled Due to Missed Premium Payments

In order to keep on receiving cover for you and your car, you need to keep on paying your regular premiums. If your premiums get into arrears, you are running the risk of cancellation. Basically, your insurance provider can cancel your policy at any time if you are not up to date on payments.

Car Insurance Cancelled Due to Non-Disclosure

When you sign up for an insurance policy, your insurance provider is going to ask you a few questions about your driving history, your insurance claim history, and the history of your vehicle. You need to answer these questions truthfully so that the insurance provider knows what they are dealing with.

If you've omitted any information – even accidentally – the insurance provider may cancel your policy. The information doesn't have to be major, and may not relate to claims or accident history, but leaving out any information may give your insurance provider grounds to cancel. This is what a non-disclosure car insurance cancellation means.

Car Insurance Cancelled Due to Fraud

Hearing the word "fraud" automatically sets alarm bells ringing. It's a crime to defraud an individual or an organisation out of money, and no one is going to proudly declare themselves a fraudster.

The trouble is, fraud can take many forms. We might think of organised rings of fraudsters working to cheat insurance providers out of money, pushing up premiums for everyone else. We might also consider fraud to be a systematic, carefully thought-out scheme that intentionally targets insurance payouts. In most cases, however, this is not the case – fraud may simply involve bending the truth or knowingly providing a little bit of incorrect information that may lead to financial gain. Of course, insurance providers take this very seriously, and are likely to cancel a policy if they think fraud has taken place.

Car Insurance for Cancelled Drivers

Okay, so you may be able to get car insurance after a cancelled policy – which is a major relief, as all cars need to be insured in some way unless they are registered as off the road, or SORN. Now, you're probably wondering how it all works – who will insure you, and how do you get insured? Here are a few things to bear in mind.

Your Choices Are a Little More Limited

First and foremost, you'll need to bear in mind that not all insurance providers are willing to work with cancelled drivers. Some providers may simply reject your application if you have had cancellations in the past. But this is not true for all insurance providers – you might just need to shop around a bit more.

You May Have to Pay More

If an insurance provider does decide to offer you coverage, you can expect to pay more than you have done before. Insurance providers work on a risk basis, and they want to reduce this risk wherever they can. If they cannot reduce the risk, then they will likely increase premiums or add other charges to make up for this.

This may mean that you pay a greater premium for your car insurance than a driver without a previous cancellation.

The Reason for Your Initial Cancellation May Be Considered

As we've already seen, there are a few different reasons for car insurance cancellation. It's likely that your insurance provider will consider some reasons to be more serious than others. For instance, if you forgot to tell your previous provider about a change in your circumstances and experienced cancellation as a result, other providers may view this as a genuine accident and mistake. If, on the other hand, you intentionally defrauded your previous provider, insurance companies are less likely to accept you as a client.

Often, these decisions are taken on a case-by-case basis. Often, if you have had a cancellation in the past, you may represent a greater risk for insurance providers in the future, but they may be willing to work with you based on your personal circumstances.

The Cancelled Car Insurance Database

You might be wondering, "How do insurance providers know about my cancelled policy?"

Well, they can find out through the Claims and Underwriting Exchange – or CUE – database. This is where information about previous claims and cancellations on car insurance, and other forms of insurance, is stored. Most providers can simply check this database and verify what their customers say on their applications. If the information does not match up – i.e., the customer has not given the whole truth or has bent the truth a little – the insurance provider may decide to cancel the policy.

A few final tips...

You can likely still get insurance after your policy have been cancelled:

  • But you may need to shop around to find a policy from another insurance provider which best suits you and your wallet
  • Insurance cancellation is something you'll need to declare to your new insurance provider

Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.