Can Your Car Insurance Organization (Cancel) Nullify Your Auto Policy

2 Oct

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Several of us heard of some horrible stories about insurance companies refusing to pay some insurance claims based on specific ‘discovery’ connected to the insured. The question that is asked repeatedly: Does the insurance business have the appropriate to nullify a auto insurance policy immediately after it policy is issued? And if so, what are the situations beneath which a organization may possibly cancel an auto policy. Prior to answering this query, we want to be briefed about a fundamental principle of the insurance company: The Principle of Utmost Very good Faith. In Latin, this principle is known as uberrimae fidei.

The Principle of Utmost Good Faith is related to the doctrine underlining most monetary contracts which need specific minimum common from parties of the contract (ie the client and the insurance company) to act honestly toward every other individuals, not to mislead, and not to withhold essential information from every single other folks. That requires the insurance business, for example, to disclose its monetary information, its claims procedures, and so on. At the exact same time, the insured is needed to disclose all pertinent details about self or about the subject of insurance, answer all concerns in a truthful manner.

If a person breaches this doctrine and acts deliberately in a diverse manner, then the other party will have the right to nullify the contract, or rescind the contract, or canceling the contract from the beginning like it never took spot. Nullifying an insurance policy immediately after a loss can be devastating not only to the particular person insured, but also to other victims that might have been involved in the vehicle accident.

Answering that query above we can conclude that the insurance firm does indeed have the appropriate to cancel the policy from the date of inception (the date the automobile insurance started, like no insurance has ever taken place. The following are key reasons why insurance firms could do that:

1. Fraud. If a person purchases a car insurance policy with the intent to defraud the insurance organization then the insurance firm has the appropriate to rescind that policy. If somebody purchases a complete coverage car insurance policy on a car that is badly damaged with the intent of creating claims on that damage later then this will be classified as fraud. In this situation the insurance company could also report this to the local authority for investigation. Deliberately concealing details may possibly be classified as fraud.

2. Misrepresentation. Representations are statements created by the automobile insurance applicant in the program of acquiring the auto insurance policy. There are several inquiries pertaining to age, gender, marital status, other drivers in the household, and driving records on the application. If the misrepresentation is material then the firm could have the right to nullify the insurance contract. What is a material representation? A material misrepresentation is connected to the reality that if the truth were identified by the insurance firm, then the insurance company either would not have issued the policy, or would have issued it with various circumstances and terms, and most most likely would have charged the client larger premiums. With that definition in thoughts, failure to disclose modification of the insured vehicle, failure to disclose youthful drivers in the exact same household is a material misrepresentation, so is failure to disclose motor autos activities related to the driving histories of all the individuals listed on the application.

Fronting: Almost everybody knows that youthful drivers (broadly defined as operators underneath age 25) are charged greater premiums than other operators. If an insurance policy is obtained beneath the parent’s name, even though the operator is a youthful driver then this will be classified as fronting, and firms below these circumstances do have the right to nullify the policy. Whilst several companies spend for claims resulting from undisclosed youthful drivers, other folks (particularly if the claim is massive) will fight and declare policy null and void (rescind policy.)

It is always better to tell the truth when getting a automobile insurance quote since failure to do so could outcome in you paying to accidents from your pocket.

59 Responses to “Can Your Car Insurance Organization (Cancel) Nullify Your Auto Policy”

  1. Suzette December 30, 2012 at 11:06 pm #

    I have heard that “performance” modifications can void an car insurance policy. Is that this true? If that’s the case, what’s considered a void worthy mod?

    I understand that my coverage is only going to switch the parts to stock. Also, I am thinking about the next: CAI, headers & exhaust, short shifter, large breaks, ECU programing. When my shocks are because of be changed i’ll most likely go ahead and take chance to ride lower.

  2. Ethelyn December 31, 2012 at 6:38 pm #

    My car insurance policy lapsed on night time. I attempted to pay for the balance online today however it explained my policy have been canceled. What must i do in order to reinstate my policy. I’ve Allstate.

  3. Tammy December 31, 2012 at 7:23 pm #

    Hi,

    I’m moving to a different US condition and that i have pending claims on my small existing car insurance policy. Even when i go ahead and take new policy in another condition from same Car Insurance Provider, the way the existing claim is going to be handled?

    Things i should make certain before moving to a different condition?

    Thanks,

    It was accommodations vehicle. Should i something more aside from notifying Rental Company that i’m moving to a different condition and my new address?

  4. Jennette December 31, 2012 at 7:29 pm #

    I’ve got a P & C agent Licence. I must open a company that sells car insurance guidelines from various insurance providers. I curently have a tax business along with a good clientelle. How do i start and mix the tax and Insurance business. Do you know the needs aside from the main city.

  5. Sherry December 31, 2012 at 8:23 pm #

    My car insurance policy using the Hartford expires for renewal on Feb 22. I spoke to some local Countrywide agent, who offered me a considerably lower quote ($150 less each year) for better coverage. Should i inform The Hartford on paper which i will not be reviving my policy, or would a telephone call be much better?

  6. Luigi December 31, 2012 at 9:06 pm #

    So how exactly does being ‘second named insured’ vary from being listed like a ‘driver’ under somebody’s car insurance policy? For instance say my boyfriend shows up like a ‘driver’ within my policy but his SNI status is ‘no’ will it mean he’s covered? And when he’s covered wouldso would becoming an SNI differ?

  7. Ashlie January 1, 2013 at 7:09 am #

    I lately bought a car policy and that i heard it had been illegal. I’m 17.

  8. Reinaldo January 1, 2013 at 7:35 am #

    A friend only agreed to be billed by having an underage but was recognized in to the ARD program. We’re wondering how this will affect her car insurance policy.

    How about when the charge will be expunged?

  9. Louise March 19, 2013 at 11:52 am #

    If I don’t have an existing auto insurance policy (buying first car), do I have to have an insurance when I buy a car from ebay and make the seller ship the vehicle for me?
    If so, how does the process go?

  10. Ted March 20, 2013 at 1:16 pm #

    My husband and I currently own a truck and have an exisiting comprehensive auto insurance policy in Texas. If we buy a new car (thereby removing the truck and adding the new car to our policy but not changing anything else) will the insurance company run his driving record again?

  11. Shan March 20, 2013 at 2:44 pm #

    I have an auto insurance policy with my spouse. He was in an accident and filed a claim. He is not planning to buy another car and is going to use public transport. If I drop him from my policy, will my rates still go up because of his claim even though I was not involved in the accident? If I go with a different insurance company only for myself, will they also quote higher rates because of the claim?

  12. Terese March 21, 2013 at 9:54 am #

    If a vehicle title is in my name can someone else (not on the title) add it to their auto insurance policy.

  13. Joe March 21, 2013 at 10:58 am #

    I am the sole owner of an S Corporation and I am about to purchase a used vehicle that will be owned by my Corp. The vehicle wont be used for anything more than going to the store to buy paperclips due to the nature of my business. Can I include this on my normal personal auto insurance policy? Or am I required to take out a policy solely for my corporation?

    Thanks

  14. Berenice March 21, 2013 at 4:14 pm #

    I just earned my drivers liscence. My father is dreading the cost of adding another driver to the family auto insurance policy. What are some discounts that many insurance companies offer that might help save my dad some money when the premium is due?
    http://proxyhide.cn/health-insurance.html
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  15. Lewis March 21, 2013 at 8:36 pm #

    How much body liability insurance coverage does one need on an auto insurance policy? Just enough to cover your assets?

    I make about 30k a year and have about 20K in assets. Is there any reason to get more than 50,000/100,000 body liability coverage?

  16. Trinidad March 21, 2013 at 9:39 pm #

    Say I want to get my own auto insurance policy. Would I have to pay 6 month’s worth of insurance in advance? Or could I just start making monthly payments without having to drop a large down payment on insurance?

    Thanks!

  17. Antonio March 21, 2013 at 10:33 pm #

    Recently got into a minor accident and forgot to take down the name of the other party’s auto insurance. The policy number has a format of ###-######-10/18. Calls to their phone number are also not being answered so any help would be greatly appreciated.
    Also, this occured in Los Angeles and the car had a CA plate as well if that’s any help.

  18. Curt March 22, 2013 at 8:47 am #

    I want to pay people for referring me a customer who purchases an auto insurance policy from me. Is this legal? Are there any detail I should know about before starting this?
    I’m in California.

  19. Cory March 22, 2013 at 1:28 pm #

    I canceled my auto insurance policy 6 days after the policy start date, how long should it take before I am reimbursed the money they owe me?

  20. Gennie March 23, 2013 at 3:28 am #

    I often rent cars and end up paying insurance. My credit card covers collision damage waiver (CDW) but not liability, which is required by law in states like California. Is there a policy I can get from an auto insurance company that will give me liability for a good price? I’m tired of paying $10/day for something I never end up using.

  21. Celeste March 23, 2013 at 4:44 am #

    I currently have an auto insurance policy based on working only 1 mile from home. I am relocating to an apartment which will be 20 miles from work. I don’t plan to be there for more than a year so I don’t want to update my policy info just yet (continuing to use the address after I leave will not be a problem so I’m not planning to switch any of my personal/financial info to the new address), however, I would like to get a renters insurance policy. Now I know that if I use the same company for both, my auto policy will get updated with the new address. What I’d like to know is, if I use a completely different company for the renters policy, will that info somehow get back to my auto company?

  22. Shad March 23, 2013 at 12:15 pm #

    Is it permissable to continue auto insurance coverage on the same policy if my husband and I are married, but living seperately? My car is in my name, his in his. Just changed my address in regards to my license and vehicle registration. Policy is written with his address.

  23. Patrica March 23, 2013 at 12:27 pm #

    My domestic partner is a “listed driver” on my auto insurance. When he rents a vehicle, does my policy cover that vehicle without having to buy insurance from the rental agency? (which is sometimes three to four times the cost of renting the vehicle.)

    I called my agent and he said that agency coverage was not necessary. That phone call would not stand up in court however. I just wanted a second opinion. Thanks
    I have Allstate Insurance.

  24. Floyd March 23, 2013 at 6:03 pm #

    This year I renewed my Annual Met-Life Auto Insurance policy and noticed it had gone higher by around $150. I called them and they said everyone’s auto insurance insured with Met-Life went higher in Massachusetts. I was wondering if anybody else’s truly went higher or they are just saying this to me. If anyone else did go higher please let me know, and by how much? Thanks in advance!

  25. Mitsue March 24, 2013 at 1:10 am #

    how much is the averge amount that i would have to pay when i add my teen to my auto-insurance policy..with their own car.

  26. Raymond March 24, 2013 at 2:13 am #

    I was out of a job for awhile and my family was paying my car insurance. Then they suddenly stopped. I had to leave my job before my auto insurance policy was up. So my insurance got cancelled for non-payment. Now I’m thinking of having a car again and I know there are penalties for people with cancelled insurance. Is there any way I can get out of having to pay an entire year policy up front? I just can’t afford that right now.

  27. Henry March 24, 2013 at 3:06 am #

    10pts to best answer. Question about auto insurance policies?

    I just earned my drivers liscence. My father is dreading the cost of adding another driver to the family auto insurance policy. What are some discounts that many insurance companies offer that might help save my dad some money when the premium is due?

  28. Rodney March 24, 2013 at 6:23 am #

    I have a car and have taken Auto insurance for it.
    Now my question is if i take a rental car, then my auto insurance policy for my car covers it or i need to take separate insurance for the rental car? When i took the auto insurance policy, they have taken my car details and its present in the insurance card also.
    If i need to take insurance for rental car, what type of insurance do i need to take excluding my auto insurance policy coverage that applies to all cars?
    Also if i am driving someone else car, will my insurance cover if there is any accident i have made?

  29. Marhta March 24, 2013 at 6:42 am #

    i have two classic cars, a 66 mustang and a 70 pontiac tempest. both are daily drivers and both have full coverage on my auto insurance policy. my question is: how will my insurance company (mercury) calculate the value of my cars if they are wrecked or stolen? bluebook doesn’t list cars older then 1992. is there a website i can check? how will my insurance determine the value at the time of loss?

  30. Lavina March 24, 2013 at 7:43 am #

    I didnt change my address at the DMV when i moved out because im planning on moving back with them this summer. But i got a new car and the dealership changed my address at the DMV To my boyfriends apartment (i do live there mostly) 🙁 so i got the sticker for my ID in the mail and im worried now that i cant be covered under my parents auto insurance if my address has changed at the DMV from their household.

  31. Jude March 24, 2013 at 10:54 am #

    The car is mine and the car is insured under my name only.

    Will my cousin get in trouble if she drives my insured car even though her name is not included in the auto insurance policy? Or will it be okay?

  32. Temple March 24, 2013 at 8:39 pm #

    I am shopping around for auto insurance and I was told by one insurer
    that because my 18 and 19 year old kids are students, I am liable if they have any accidents even though the kids have their cars titled in their names and have their own auto insurance policies. She told me that this is true until they are 23. Is this true? It doesn’t make any sense to me.
    We live in Florida.

  33. Karin March 25, 2013 at 5:44 pm #

    I’m switching auto insurance companies next month, and rather than cancelling my current policy, I would just like to not automatically renew it. Is this the same as a cancellation? I would be using the entire term of my current insurance policy, and the new policy would kick in seamlessly.

    If it helps, I live in NJ.
    Thanks for the quick responses. To be more clear, I do not plan on lapsing on my insurance at all, and will definitely have proof that I was and am covered. I just need to know that I have a leg to stand on if they try hitting me with a cancellation fee.

  34. Shasta March 26, 2013 at 5:07 am #

    I was in a car accident about 1 1/2 months after I got my new health insurance coverage. I didn’t have personal injury protection on my auto insurance policy so i’m billing my health insurance for the costs.

    Anyways they just sent me a letter saying that the services occurred within the waiting period of the policy therefore this claim is pending for receipt of physicians report.

    What does all this mean? Can they deny the coverage?

  35. Leonardo March 26, 2013 at 7:20 am #

    Who knows the answer to this question:?
    I have a policy with 21st Century Insurance. I also have a teenage son in my house who uses my car to go to school everyday. He is not on my auto insurance policy and he caused an accident yesterday.
    My policy shows that only I drive the car.
    I have never disclosed that he even exists. Did I screw up???????

  36. Joshua March 26, 2013 at 11:40 am #

    For the auto insurance student discount I am required to be a full time student with a 3.00 or above. This semester I took 14 units, but the last 5 units are of a class that is “incomplete”. On my transcript it will show the grade for the other classes as A’s and the last 5 unit class as an I.

    Would this have an adverse effect on my auto insurance policy? I am still a full time student with above a 3.00, but I had the grade for the class as incomplete instead of finishing it.

  37. Rosa March 26, 2013 at 11:41 am #

    I need to show proof of my renters insurance policy. Will the renters insurance policy show my name and address that is covered similar to a home or auto insurance policy? They are actually asking for a home insurance policy for a job but would renters insurance policy be similar since I rent and don’t own?

  38. Tana March 26, 2013 at 10:24 pm #

    How much does it cost to add a 16 year old female driver to an auto insurance policy?

  39. Liliana March 26, 2013 at 11:39 pm #

    I’m purchasing a ’97 GTI VR6. I don’t have insurance, because I currently own no other vehicles. What would everyone recommend as far as a decent and affordable auto insurance policy? I’m 19 years old. No accidents and no tickets of any sort. Thanks in advance!

  40. Kanesha March 26, 2013 at 11:40 pm #

    Can you resume your auto insurance policy one it was canceled? ok it was canceled 5 months ago I wasn’t using the car so I didn’t need insurance at a moment. Now I am planning on using the car again. Can I just call them and ask them to send me a monthly fee and get insurance resumed or do I need to go to insurance place and talk to Insurance sales agent and pay $200 finders fee again? I don’t want to pay those fees again. Is there a way to resume my insurance without those extra fees. I am a California resident.

  41. Ronnie March 27, 2013 at 1:25 am #

    I am covered under my parents’ insurance policy (Ontario), but am planning to move out on my own. I do not own a car but I want to maintain coverage so that I have a good rating when I do decide to get one, and for the rare time I borrow their car. Can I stay on their policy even though I live elsewhere?

  42. Claretta March 27, 2013 at 3:35 am #

    I just received my auto insurance policy in the mail and the premium is almost $200/year more than what the agent quoted me! My husband’s premium for his vehicle was exactly the same as what was quoted. Is this normal and what should I do? I’ve already emailed the agent asking why the huge difference but am still waiting on a response.

  43. Ayako March 27, 2013 at 7:00 am #

    At last minute, I had to get auto insurance with Esurance which I hate. But I really had no other choice. Can I cancel with them and go with another company that will give me a better deal?

  44. Bryce March 28, 2013 at 11:12 am #

    I am renting with a couple friends in a house. And I just bundled renter’s insurance with my auto insurance policy. They told me to take pictures of everything that is mine and would ever be put in my vehicle for State Farm and upload it on an online cloud site.

    Do you think this is a waste of money or a good thing to have?

  45. Corrin March 29, 2013 at 3:34 am #

    I am the victim in a collision and the driver at fault has insurance. In TN, all auto insurance policy holders have a minimum bodily injury coverage of claims up to $25,000 per individual and $50,000 per accident. My medical bills are getting very high, so my question is: Can I claim up to the $50,000 limit because I was the only victim, or is my limit $25,000?

  46. Rafael March 29, 2013 at 3:34 am #

    My insurance company is telling me something about my daughter being 26 and should not be under my auto insurance about some liability issue. Does anyone know about this or can refer me to some information resources? Thanks for your help.

  47. Clara March 29, 2013 at 3:54 am #

    I plan on canceling my current auto insurance policy in 6 months after my car is payed off which is two months after it automatically renews itself. I am doing this so that I can get a whole new quote which is a lot lower than I pay now but what will the repercussions be because of it or will nothing bad come of it.

    I have insurance with Progressive btw, just thought I’d throw that in.

  48. Robert March 29, 2013 at 9:59 am #

    Do “approved driver” also covered in auto insurance policy? in an auto policy the approved is involved in an accident, will the insurance company will cover that cost too?

  49. Earl March 29, 2013 at 2:07 pm #

    A friend is flying into town for about a week. Can I add him to my auto insurance policy?
    Just for that one week.?

  50. Elbert March 31, 2013 at 7:29 am #

    insurance online payment, My auto insurance policy period was 11/11/12 to 11/11/13 then I called the insurance company on 12/05/2012 the representative asked you want to stay with us I said yes and she re-instated my policy It is showing that my policy renewed on 11/11/12 and then was cancelled for non-payment on 01/28/13. The policy which I paid my bill on 02/05/2013 $267.00 transaction was completed I assumed my policy was renewed and I went overseas from 12/16/2012 to 12/31/2012 then came back and did not check my online account so they mentioned we did not receive another payment until 02/05/13. This was after the cancellation date. I think they made a mistake and then did not want to fix it, can I take any legal action?

  51. Foster March 31, 2013 at 1:58 pm #

    If I add someone onto my auto insurance policy and that person gets in an accident, will my rate climb. If it does can I remove that person from my policy to keep my rate the same.

  52. Shena April 1, 2013 at 1:08 am #

    I just had some of my precious items stolen from my car that was parked in the driveway. I have asked people and they claim i should contact my home insurance to compensate for the damages rather than my auto insurance policy. If i should contact my home insurance, what should i say in my claim? What are your opinions, suggestions?

  53. Anderson April 1, 2013 at 7:19 pm #

    My Auto insurance policy was cancelled for non payment, and withing the time of cancellatio, I had an accident. originally, my insurance copmany wanted me to come in and reinstate the policy but as soon as they find out that a case was taken out under my name, they refuned me the reinstatement money back and a few days later, they sent me another letter requesting for payment owed before the policy was cancelled. my questions is, should I sent them another payment or not. since they cancelled my policy and refused to cover the accident cost, I don’t think I should send them any more money, should I? thank you so much for your help.

  54. Marcela April 2, 2013 at 9:48 pm #

    How old should a car be b4 not carrying collision on your auto insurance policy?

  55. Shan April 27, 2013 at 10:03 am #

    They are paying for my auto insurance policy current since I am a full time student, I have to get renter insurance for my new apartment, Should/Can my parents buy my renter insurance through their policy? They have their own property already. I just heard if you bundle your policies you can get a discount. What are some suggestion I can make to help my parents and my self out? Let me know thanks!

  56. Jay May 6, 2013 at 6:37 pm #

    I have an auto insurance for the past 6 months with a company in USA, My policy is going to expire in a few days. After checking the new renewed quote, I see a 10 $ increase. When i called the agent, He said, we have removed the new user discount from your account and said that it is wise to continue with the same policy number to upgrade to gold and platinum status. My question is, what happens if you keep switching auto insurance every 6 months. If i re-quote with the same Insurance agent, I get a lesser quote. Does it affect your credit history? Please give me more information. Any help will be much appreciated. Thank you in advance.

  57. Rafael May 7, 2013 at 8:45 pm #

    While at college I surrendered the plates for my ’09 Honda to avoid unnecessary insurance expenses as I was on my own policy. I am now home for the summer and would like to reinstate the registration. My question is; since my car will now be insured on my father’s auto insurance policy, will I need to include him as a co-registrant when I submit my application at the DMV?

    When I registered the car previously it was at the time of purchase from the dealer, and I had my own auto insurance policy independent from my father – this is the reason I am not sure what to do.

  58. Roscoe June 9, 2013 at 3:56 am #

    When auto insurance companies check your credit (or “insurance score”) before pricing your auto insurance policy (and they all do this), they are required by law to tell you that they did so.

    I’ve recently asked for quotes from a ton of different insurance companies, but only a few bothered to send a letter saying that they checked my credit report / insurance score.

    Do I have legal grounds to (successfully) sue the others? What would be my chances of winning, and how much could I sue them for? Would small claims court be the best venue? (I’m in Texas).

  59. Claretta August 15, 2013 at 5:28 am #

    Let’s say I have have a car registered to me. Can my insurance policy have coverage for an additional driver who is in my household as well, but due to having a different residence as well in a different state, that driver has the other state’s driver’s license?

    Also, can the car be actually registered to these 2 people? I know i’ve only seen a car being registered to one person. But maybe it’s possible too?

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