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HOME : Just the FAQs Ma'amCancelled! Can my insurer do that?While I was away on vacation, my insurer sent me a letter by registered mail saying my property insurance was being cancelled due to "non-payment of premium." By the time I picked up the letter at the post office three weeks later, the cancellation had already taken effect. So now I'm without insurance, and yet I was sure I had paid my premium! Are insurance companies allowed to cancel policies whenever it suits them? As frustrating as it
is to have your coverage pulled out from under you, your insurer IS
entitled to cancel your insurance at any time, as long as it follows the
proper procedures. First of all, the
insurance company must give you written notice, delivered either
personally or by registered mail. If the notice is personally served, the
cancellation takes effect five days after delivery; if it is sent by
registered mail, the cancellation becomes effective after 15 days,
starting from the day after the notice has been delivered to the
addressee's post office. Whether or not you actually pick up the notice
from the post office makes no difference, as you discovered. Insurers are not
required to give you a reason for canceling your coverage, but they may
choose to do so, as your insurer did. Probably the most
common reason for cancellation is unpaid premiums. Under these
circumstances, the insurer has no choice but to cancel. Otherwise, it
would be obliged to cover you even if you hadn't paid a cent. However, if there has
been a genuine misunderstanding about an unpaid premium, as you imply,
explain it to your insurer right away. If the insurer agrees that it was
an honest mistake, it may be willing to resume your coverage from that
point on. Otherwise, your record
will show that your insurance was cancelled for non-payment of premium,
and may come back to haunt you when you apply for insurance at another
company. And if you have a mortgage on your house, the mortgagee will also
receive notification of your cancellation. That could really put you in
the doghouse! The insurer may also
cancel your policy if it discovers that you have withheld important
information about the risk it is insuring. So don't give your
insurer cause for cancellation. That way, you can keep your coverage
intact and leave the cancellations to the television networks! Note: Remember, policies
vary, so when in doubt, Contact
Us. |
