Can You Legally Be Denied Car Insurance?

THURSDAY, OCTOBER 29, 2020

Can You Legally Be Denied Car Insurance?

Despite the fact that car insurance is required by state law throughout the U.S., insurance companies are well within their rights to deny you coverage based on certain circumstances.

It is not common that a car insurance provider will deny a client, but it does happen. Generally, drivers are denied if they are considered high-risk. High risk drivers are drivers who are more likely to file a claim due to a bad driving record or poor credit score. A bad driving record may include:

• DUIs/DWIs

• Multiple speeding tickets within a short time

• License suspension

• Traffic violations

Multiple car accidents within a short time

If a car insurance agency believes that you are too high risk to insure, they can deny you service. You can also be dropped from a policy if you become a high-risk driver while insured, such as if you file too many car insurance claim within a short amount of time.

A poor credit score is generally seen as how reliable you are in paying premiums. If you have a poor credit score, you could have trouble finding a good car insurance policy.

Other Ways You Can Be Denied Car Insurance

Aside from your driving record and credit score, you can also be denied car insurance or have your policy cancelled if you fail to pay your premiums on time or lie to your insurance provider about your record or an accident.

Failing to pay your premiums or missing too many payments can lead to a policy being cancelled, as well as a drop in your credit score. This doesn’t make it impossible to get car insurance, however. You can build credit by paying off loans and credit cards as well as setting up automatic payments for all of your important bills.

Lying to your car insurance provider, however, is considered soft fraud and can make it difficult for you to get insured. Your DMV and insurance provider work together when it comes to your driving record, so your record and any accidents can be transferred to your insurance provider through your DMV. If you are caught lying about your driving record, your insurance provider may cancel your policy.

Can I Get Car Insurance with a Bad Driving Record?

Simply having a poor driving record or low credit score doesn’t mean that getting car insurance is impossible, however. There are many insurance agencies that specialize in high-risk drivers. Just be careful about hidden fees where they may try to compensate for the risk of insuring you.