Can Car Insurance Deny Coverage?

Lucy Lazarony
December 21, 2020

There are many reasons you may be turned down for an auto insurance policy. For instance, if you have a poor driving record, an insurer may worry that you are too risky. If you have many traffic accidents, DUIs and speeding tickets on your record, you may be turned down for car insurance. And you may be rejected if you’re a new and inexperienced driver. Teenagers may have trouble getting car insurance because they have so little experience behind the wheel. You may also have trouble if you have no insurance record. This is often the case for young drivers, who may have been on a parent’s policy.

If you have a bad insurance record, with late or missed payments, this will hurt your chances of being approved for car insurance. If you have a dicey credit record with late payments and delinquent payments or a bankruptcy, you’ll have trouble getting car insurance.

Insurance companies use credit ratings to assess risk and the lower the credit score the more risky the customer. If you live in an area where there are high rates of theft and vandalism, this will hinder your chances of getting car insurance. If you haven’t driven or been insured for many years, this will make it more difficult for you to to get insured and your rate may be higher.. Finally, if you have a custom or classic car that you are looking to insure, you may have a tougher time getting car insurance.

Getting Turned Down for Car Insurance

What should you do if you get turned down for car insurance? Pick yourself up and apply at another company, and another company until you find one that will take you on. To save time, you’ll want to get quotes from several different car insurance companies at the same time. With the help of SmartFinancial, you’ll be comparing auto insurance rates near you in no time.

Try a State-Assigned Risk Pool

Not having any luck buying car insurance in the private market? Check out the assigned risk-pool in your state. Your state will assign you to an insurance company doing business in your state, and you’ll get insurance coverage. The car insurance premiums in a state assigned risk pool are much higher than premiums purchased in the private insurance market. So be ready for a high-priced premium if you pursue this route for insurance.

There are companies in the private insurance market that specialize in offering insurance coverage to high-risk drivers as well. These insurance companies write policies for people with spotty driving records, for people who live in high-crime neighborhoods and for people who drive classic cars. A high-risk auto insurance policy could cost you five times more than a standard insurance policy. So as with an assigned risk policy, be ready for a big price jump. To get a list of these high-risk insurance companies, reach out to an insurance professional and to your state insurance department.

To find a competitively priced policy, try SmartFinancial first.

How to Lower Your Driving Risk

Here are some steps you can take to lower your driving risk.

Take a Defensive Driving Course. These courses will teach you how to avoid accidents and other safe driving behaviors.

Be a Safe and Responsible Driver. Follow the rules of the road. Avoid speeding tickets, DUIs and being at fault in accidents. Don’t text and drive. The sooner you build up a good driving record, the better it will be for your car insurance premium.

Build Up Your Credit. Insurance companies use consumer credit records to assess risk. Those with good credit get the lowest insurance rates. Those with bad credit get the highest insurance rates. Improving your credit will help to lower your insurance premium. So get current on all past due accounts, pay down debt and avoid taking on new debt, all these things will help to improve your credit rating.

When Can Car Insurance Companies Cancel Car Insurance?

Your insurance company can usually cancel an auto insurance policy during the first 30 to 60 days of coverage for any reason. After that time period, they won’t be able to drop your coverage until the policy is up (either six months or a year, depending on your policy). But there are exceptions to this, such as you’ve stopped making payments or had your license suspended. If these scenarios happen to you, your insurance company may be able to drop your coverage. Find Affordable Car Insurance

Tips for Paying Auto Insurance Bills On-Time

If you fall behind on your auto insurance payments, you risk losing your auto insurance coverage. Here are some tips to keep your account on track.

Automate Your Payment. Having a hard time remembering to pay your auto insurance bill? Sign up for an automated payment. With an automated payment, your bill gets paid each month and you don’t have to write a check. You can even sign up for e-billing so there’s no paper statement to keep track of.

Reach Out Before You Fall Behind. It’s been a difficult year for a lot of people. Reach out to your auto insurance company and let them know it will be a struggle to make the payment as agreed. Would they defer a payment or accept a partial payment? How much can you afford to pay? Take a hard look at your finances and let them know.

Pay with Money from Stimulus Checks. Those $600 stimulus checks are on the way so you may have some cash to pay your auto insurance payment soon. If you are behind on your car insurance, let the insurance company know that you’ll be paying your insurance when your stimulus checks arrive.

Rework Your Budget. Your car insurance is an important bill that you need to pay. Other items such as lattes at a coffeehouse and dinners out are extras. Go through your budget and cross out items that are nice to have but not essential until you have enough money for your car insurance payment.

Lower Other Expenses. One way to get the money to pay for car insurance is to lower other expenses. Can you get by with a more affordable Internet package or cable bill? What about your smartphone bill? Lowering these monthly bills can put more money back in your budget. The extra money will help you pay for your car insurance bill.

Bundle Your Auto Policy. Do you have a home insurance policy or a renters insurance policy at the same insurance company as your auto insurance policy? Bundle the policies together and save on your auto insurance policy.

Pay Once or Twice a Year. Auto insurance premiums are their lowest when you pay once or twice a year. Monthly auto insurance premiums are more expensive. So if you have the money for a six-months or one-year policy, pay it. This is another good use for the $600 stimulus checks. If you are getting ready to renew your policy, you can choose the annual amount or six-months policy and save money on your premium.

Get a Free Auto Insurance Quote Online Now.

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