Taking out car insurance is a golden rule to follow when accessing public roads while driving a vehicle. The insurance contract protects the member from various delicate situations that may arise on the road. If you have your driver’s license, you certainly know that you must be constantly covered by car insurance with at least civil liability cover. For various reasons, the insurer may terminate the insurance contract. In such a situation, you need to find another contract as soon as possible. Discover through this article the causes and implications of the cancellation of insurance as well as the solutions in this case.
Canceled car insurance: what is it?
A terminated car insurance is simply a broken vehicle coverage contract. The insurer and the insured each have the right to terminate such a contract under certain conditions. As an insured person, the Hamon law allows you to change insurance whenever you wish after the first anniversary of the contract. You do not have the obligation to justify your decision. You will simply have to inform the insurer via a registered termination letter with acknowledgment of receipt.
In these circumstances, breach of contract will not be a problem for you. The termination of car insurance becomes problematic when it is carried out at the initiative of the insurance company. The latter is entitled to terminate the contract when the terms are not respected by the insured. If she makes this decision, she is called upon to send you a registered letter with acknowledgment of receipt.
Upon receipt of this letter, you should begin by looking for new insurance. On the other hand, you have the possibility of contesting the termination if you consider that it is unjustified. For this, you must call on a mediator. The latter’s role is to study the situation and settle it amicably, if possible. However, this recourse only makes it possible to win the case in rare cases.
Indeed, the insurers terminate the contracts after an in-depth analysis of the files of the insured. The ideal is to take note of the termination when it occurs and to search for alternative contracts without wasting time. It is possible to find car insurance for terminated at the best price by directing you to specific insurers. The support of an insurance broker will also be useful.
What causes auto insurance termination?
If your car insurance has never been canceled by an insurer, you can avoid such a situation by paying attention to the causes. Similarly, if your contract is terminated, look at the potential causes to find out if the insurance company is right or not. Note that insurers generally terminate car insurance for:
- penalty,
- non-payment of dues,
- increased risk,
- license suspension…
As a reminder, the bonus-malus is set up with the aim of promoting responsible driving in traffic. The bonus corresponds to an advantage enjoyed by the driver when he is not responsible for an accident during a given period. This lowers the cost of insurance. As for the malus, this is equivalent to a sanction which applies to the driver involved in the occurrence of an accident.
The malus increases the cost of insurance. Its percentage is determined according to the level of responsibility of the insured in an accident. The insurance premium is regularly calculated according to the bonus-malus. The insurer may terminate the coverage contract if the rate of the malus has experienced a monumental increase and makes the premium very high.
Non-payment of premiums is another very common cause of auto insurance termination. By entering into an insurance contract, you have an obligation to pay an insurance premium to the other party. If you do not do this in accordance with the terms of the contract, the insurer has the right to suspend the cover it offers you.
If your contract is terminated for this reason, you are forced to settle the sums due before obtaining a new insurance auto. Your identity will be referenced in the file of AGIRA (Association for the management of insurance risk information). All insurance companies will indeed be aware of your situation. None of them will accept your application for coverage until you pay your dues.
In addition, the termination of car insurance at the initiative of the insurer may occur if the covered vehicle has been the subject of many claims. Certainly, insurance companies are supposed to protect their customers in the event of claims. However, they avoid covering profiles that present an aggravated risk. There are no general rules on breach of contract for this reason.
Each insurer defines the number and nature of claims after which it would withdraw from a contract. Finally, license suspension is the reason for termination of contract that is most unanimous among the ranks of policyholders. If you no longer have a licence, you cannot drive a vehicle in circulation and therefore do not need car insurance. When you have recovered your licence, you can search for a new insurance contract.
Canceled auto insurance: what are the consequences?
The termination of auto insurance by the insurer is harmful to the insured. In first place, you have to immobilize your car until you find a new cover for it. Remember that driving without car insurance is a crime punishable by law. By doing so, you expose yourself to a fine of up to 3,750 euros. Depending on the seriousness of the situation, you can also bail:
- a day-fine penalty consisting of the daily payment of an amount defined by a judge,
- a ban on driving certain vehicles for 5 years,
- a sentence of community service,
- the obligation to take a road safety awareness course at your expense,
- a judicial suspension of the driving license for a period of up to 3 years…
Cancellation of insurance also an impact on the future contract. Generally, the latter’s insurance premium is higher than usual. The reason is that the insured whose contract is broken is referenced in the AGIRA file as a risk profile. Whatever the cause of the termination, your identity will be disclosed in this directory. Nevertheless, you can get a new contract at a reasonable cost.
How to find new insurance after a terminated contract?
Auto insurance companies have, for the most part, apprehensions about the profiles displayed in the AGIRA file. However, some take the responsibility to cover them. Logically, their prices are higher than in a classic situation. However, comparing the different offers available will allow you to make an economical choice.
Beyond the cost of the insurance, you must take into account the guarantees that you will benefit from according to the chosen formula. You should also check the availability of optional guarantees. To find new insurance after a terminated contract, ask for quotes from several establishments. You will indeed have the opportunity to assess the relevance of each contract.
To make it easier for you, use a comparator. You will find offers that meet the criteria you have entered. Take the time to go through each of the proposals. In order to more easily obtain excellent car insurance after a terminated contract, use a specialist broker. A professional in the insurance sector, his mission will be to carry out the comparison work for you.
He will be able to preselect the insurance companies offering the best offers. The broker specializing in car insurance for terminated contract will make sure to specifically search for the insurance formula you want for a tight budget. The challenge after the termination of a contract at the initiative of the insurer is to avoid contracts with very high premiums. The broker will be able to help you with this.