If you want to drive in the United States, you have to carry car insurance. Most if not all states require drivers to do so. That’s why many people want to know if an insurer can cancel a insurance policy without notice.
What you need to know about your policy
The policy between you and your insurance company acts just like a contract. It specifies the reasons the insurer can cancel the policy and how to do it. In most states, however, the insurer has to give the policyholder a written notice of at least 30 days before cancelling the policy. If you want to make sure that you won’t encounter any unpleasant surprises, you should take a few minutes and read the contract. And don’t be afraid to ask questions.
The rights of the insured
Your policy acts like a contract. Once the insurer issues it, it can’t cancel the policy except for certain reasons. These reasons are always stated in the policy. They include failure by the insured to make required premium payments, suspension or revocation of the insured’s driver’s license, if the insured commits fraud, or if the insured damages the asset intentionally. In some states, the insurer can also cancel the policy for an excessive number of claims or due to significant changes in risk.
State laws limit what an insurer can include as reasons for the cancellation of a policy. And each state has an insurance commission charged with protecting consumers. They make sure that insurance companies are financially stable and that they can pay claims.
These regulators also provide services to policyholders. They ensure that the customers are treated fairly and that the insurers honor their policies.