10 Mistakes That Can Invalidate Your Car Insurance

When your car insurance becomes invalid that means your coverage has become void, causing your financial protection to stop. Your car insurance could become invalid because you misrepresented, omitted or failed to update important information. If your insurance becomes invalid, your insurance company is required to notify you between 30 and 45 days prior to your coverage ceasing. If you're unsure if your auto insurance is valid, contact your provider or the Department of Motor Vehicles (DMV) and they will tell you the status of your coverage. Driving without valid insurance can result in major penalties that include tickets, fines, vehicle impoundment and even jail time. For more in-depth information about common mistakes that can cause your insurance to be invalid, keep reading and find out what you can do to avoid losing your coverage.

What Does it Mean to Have Invalidated Car Insurance?

If you have invalid car insurance that means your car insurance company has voided your coverage, removing your financial protection.

You can verify whether your insurance is active by contacting the DMV.

What Invalidates Car Insurance? 10 Common Mistakes

Risk-profile manipulation

Providing an insurance company with false information for your risk-profile will likely result in your insurance being invalidated. Risk-profile manipulation refers to providing false information that insurance companies use when calculating your premiums. Providers will look at your age, your education, the miles you drive every year, your location, the type of vehicle being insured, the age of the vehicle, your driving record, your credit score, the number of past claims you've filed and the payout amount of each claim.

Forgetting to update or change your address

Failing to notify your insurance company about a change of address can cause your insurance to become invalid. You should always notify your insurance company when there has been a change in your home address as this information is used when calculating your premium. If you move and the insurance company has the incorrect address, the information they have will be out-of-date and your premium could be inaccurate.

Underestimating your annual mileage

Giving a lower annual mileage than what you truly drive can cause your insurance to be invalidated. You need to be able to give an accurate estimate for the miles you drive every year to your insurance company as this helps generate your premium.

New job

Lying about your occupation to your insurance company or not updating your occupation when you’ve started a new job can cause your insurance company to invalidate your coverage. Your job is used as a factor when calculating your premium. Without accurate information, the insurance company cannot give you a proper premium amount.

Car modifications

Failing to notify your insurance company about any modifications done to your car may result in an invalid auto insurance policy. This applies to both minor and major modifications. Modifications can raise the value of your vehicle making it not only a greater target for theft, but they can also make your vehicle more expensive to repair.

Non-declaration of incidents

You should always notify your insurance provider if an automobile accident occurs, regardless of who is at fault, as failing to do so may result in your insurance being invalidated. Many insurance companies have a clause written into their contracts stipulating their customers are required to report accidents even if there is no intention of filing a claim.

Letting someone else use your car frequently

Allowing drivers not named on the policy to use your vehicles may result in your insurance becoming invalid. There are, however, exceptions through permissive use wherein those who are not named on your auto policy can drive your car with your permission. Permissive use is only for infrequent use of your vehicle. Otherwise, your insurance company may invalidate your policy.

Lack of care for your vehicle

Your insurance policy could become invalid if your vehicle is not roadworthy. Make sure you take care of any pertinent maintenance that would otherwise render your vehicle unfit for the open road.

Not having the right class of use on your policy

Consistently driving your vehicle outside its intended use can invalidate your car insurance. Part of the insurance process includes telling your provider what you will be using your vehicle for. If it is meant for business use, but it's regularly used for personal use, your insurance company may void your coverage. Contact your insurance company and let them know if your use of a covered vehicle has changed.

Fronting

Fronting can result in your auto insurance becoming invalid. Fronting typically refers to when a parent names themselves as the main driver on the insurance policy for their child's car, with the child as a named driver. Children are seen as being a higher risk, so they're typically more expensive to insure. While fronting may save money, it can cause your insurance company to invalidate your coverage if they find out.

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How Can I Check if My Car Insurance is Invalid?

Below are a few options you have if you're uncertain if your insurance is invalid:

  • Contact your insurer - You can do this by phone, email, or your provider’s online portal. Make sure you have your insurance information ready so your provider can easily and quickly help you.
  • Contact the Department of Motor Vehicles (DMV) - You can verify whether your insurance is active by contacting the DMV. Have your contact information and your license plate number ready so your insurance information can be easily located.
You must give your insurance company the most accurate information possible to avoid invalidation.

What Are the Penalties for Having Invalid Car Insurance?

Driving without valid auto insurance is illegal in most states. New Hampshire and Virginia are exceptions. If you are caught driving a car without insurance, you could be issued tickets, fines, your vehicle could be impounded, your license could be suspended and you could face community service or jail time.

Car Insurance FAQs

How does an invalid car insurance policy affect my premium?

If your insurance is invalid, you will not have to pay a premium. You may receive a partial refund if this happens.

Is my insurance still valid if I sell my car?

Your insurance will remain valid as long as the vehicle is registered in your name. Make sure you call your insurance company to let them know when you sell your car.

Is my car insurance valid if my license has expired?

Your car insurance is still valid if your driver's license has expired.

Key Takeaways

  1. Having invalid car insurance means you no longer have financial protection from your insurance company in the event of a car accident due to your provider voiding your coverage.
  2. You need to give your insurance company the most accurate information possible, including what your vehicle will be used for, modifications to your vehicle and any change in your address in order to maintain valid insurance coverage.
  3. You can check if your insurance is valid by asking your provider or by contacting the Department of Motor Vehicles (DMV).
  4. Driving without valid insurance can result in tickets, fines, vehicle impoundment, jail time and license suspension.

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