What to Do if Your Insurer Wants to Cancel Your Insurance Policy
“Insurance companies are businesses, and very often people take for granted that insurance will always be there. Insurers deal in risks, and being able to assess a risk and avoid losses is part of how they survive as a business. Unfortunately, people have situations and circumstances that often fit outside the norm; insurance companies may find a situation too risky and decide to cancel your policy.
Can You Stop the Insurance Company From Cancelling You?
There’s nothing worse than experiencing the feeling of having your insurance cancelled. It’s not only upsetting, but it can be confusing. Fortunately, there are some cases where an insurance company may start off intending to cancel you, but with some negotiation and explanation, you might be able to make them change their mind.
To figure out if you can get them to continue to insure you, consider some of the reasons an insurance company might cancel you, and some suggestions on how to negotiate with the insurance company representative in each circumstance.
How Do You Make an Insurance Company Keep You As a Client?
Although there is no sure way to make an insurance company keep you as a client, you can show them that you are working with them and offer suggestions to try and change their mind about cancelling you.
Reasons an Insurance Company Might Cancel Your Policy
- Too many claims
- Insured item in disrepair, requires maintenance etc.
- Non-payment of policy or too many missed payments
- Criminal record, false declarations, or “moral hazard”
- Change in situation (also known as a material change in risk)
What Can I Do When I Have Too Many Insurance Claims?
You will have to put forth a strong argument to get an insurance company to continue to insure you if you have demonstrated a high claims frequency. One of the things you should do is review the claims you have had for yourself. Make your own analysis of your situation by answering these questions:
- How much was each claim worth?
- What was the nature of each claim?
- Were they related or unrelated incidents?
- Did the claims all occur at the same address?
- Has anything changed that makes you “less risky”? Did you have a problem you weren’t aware of that has since been fixed? Have you had a change in lifestyle, job, or personal situation?
How to Keep Your Insurance: Present Your Case
The best argument is when you can prove things have changed.
Perhaps you have now moved to a new area, and it was only in the old area that the claims happened? Think about every aspect of the claims you have had, and see if there is something you can point out that shows the insurance company your “risk” has improved or is now eliminated.
Point out any factors that may have changed, including change of residents in the household, reasons that you may be more stable (change of jobs, change of location, etc.)
Make sure the information they have about you on file is accurate. Sometimes people make innocent mistakes!
Give proactive solutions that will reduce or eliminate the risk of future claims.
Were all your claims under R1 000.00, even under R5 000.00? Perhaps ask the insurance company if they would consider letting you take a higher excess; this way the risk they are concerned about starts to diminish. It is also your way of showing them that you are willing to take on added risk and responsibility.
Ask the insurance company if there is a policy that they could offer as an alternative, for example if all the claims came from pothole damage, perhaps they have a policy they can offer you that does not include pothole damage? That would allow you to have basic insurance coverage, rather than no insurance or high-risk insurance.”
Full source credit: https://www.thebalance.com/insurance-company-cancelling-policy-2645554