Can The Insurance Company Cancel My Policy?
UPDATED: Oct 14, 2011
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Asked October 14, 2011
In order to protect policyholders from insurance companies collecting premiums and then canceling the policy, there are only a few reasons an insurance policy can be canceled once it has been put into effect. Yes, your insurance can be canceled, but only if under the terms specifically mentioned in your policy.
If you fail to make your premium payments, the insurance company has the right to cancel the policy. In the case of whole life insurance, you are entitled to a refund of the premiums and any accrued interest in the policy. Before a whole life insurance policy will be canceled, you will be given the opportunity, in writing, to bring the policy up to date.
False information given during the insurance application is cause for being canceled. For auto insurance, your policy could be canceled for misrepresentation at any time during the course of the policy. For life insurance, there is a defined contestable period, stated in your policy, during which the policy can be canceled for false statements or misrepresentation. This period is usually between 1 and 2 years, but this period may change from state to state and company to company.
As long as you were honest in your application and make your payments on time, your insurance policy is safe. If you repeatedly make late car insurance payments, the company has the right to refuse to renew the policy when it expires, but they will not cancel the policy.
You have the right to cancel your policy at any time, but you must follow a specific process. Usually, this process simply means notifying the insurance company at least one billing period before you plan to cancel, which gives the company time to put a halt on the automated billing process.
Answered October 14, 2011 by Anonymous