These days, drivers in California have more options than ever before when it comes to auto insurance. Not only are there over a hundred companies from which auto insurance can be purchased, but finding insurers, comparing rates and coverage, and signing up for insurance is easier than ever before with rate comparison websites such as AISInsurance.com.
But this “culture of choices” goes both ways. In other words, auto insurance companies can choose whether or not they wish to insure you. Moreover, these insurers can elect to declare your policy null and void under certain conditions — which can sometimes leave you on the hook for thousands of dollars in out-of-pocket costs.
Here are ten actions that can cause an auto insurer to invalidate or cancel your policy.
1. Nonpayment of premiums. California doesn’t mess around with people who don’t pay their premiums. Under state law, auto insurers need only provide ten days notice before cancelling a policy for nonpayment of insurance premiums.
2. Personal vs. business use. Standard auto insurance policies cover you if you drive for pleasure, errands, trips, and work commutes. But if you’re actually using your vehicle as part of your business (making sales calls doesn’t count), then you need to inform your insurer.
3. Lying about your address. It’s not uncommon for people to claim they live in a different zip code or at a phony address (in safer areas of town, usually) in order to qualify for a lower rate.
4. Fibbing about where you park at night. If you park on the street or in a parking lot but tell your insurance company that your car stays safely in a locked garage overnight, you may put your coverage at risk if your car is stolen.
5. Fraud. This comes in many forms, like reporting your car as stolen or setting it on fire to collect the insurance money. Not only will an insurer refuse to pay fraudulent claims, but you could also face criminal charges as well.
6. Lying about a vehicle’s “main driver.” An example is if parents buy a car for their teen driver and say it’s actually driven primarily by one or both parents. This helps lower premiums for the teen driver, but it also puts the coverage in jeopardy of being cancelled.
7. Intentionally damaging your vehicle. This seems intuitive: if you crash your car on purpose and file a claim on your collision policy, it’s fraud. But this rule can also apply to damages related to certain criminal charges, like reckless driving, or sometimes even road rage.
8. Making modifications to your vehicle. If you plan on tricking out your car’s engine, adding high-performance wheels, or putting in a turbo charger, talk to your insurance agent first. Otherwise, you could find your coverage voided if you get into a wreck.
9. Driving impaired. Your liability policy will cover damage or medical costs to people you injured while driving under the influence. But your collision claim can be denied if you’re convicted of DUI in connection with a crash.
10. Leaving your keys in the ignition or your vehicle unlocked. Many policies include language which invalidates your policy if your car is stolen under these circumstances. So lock your doors and take your keys every time.
A good way to be sure you understand the conditions of your insurance policy is to work with a reputable insurance agent like Auto Insurance Specialists. We have plenty of experience in answering questions about the conditions of auto insurance policies, as well as finding affordable rates for all types of California drivers.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.