Even though most state laws require car insurance, all insurance companies have a legal right within limits to deny a person insurance coverage in certain circumstances.
It is not common knowledge that a person is denied insurance coverage, but sometimes it happens. Most drivers that possess high risk are denied car insurance. Drivers who have high risk mainly file a claim because of poor credit scores or bad driving history. A poor driving history includes:
- Driving under the influence/ driving while intoxicated (such as drunk driving)
- Traffic violations
- Charged with multiple speeding tickets within a short period
- License suspension
- Several car accidents in a short period
If an insurance company believes you have a high risk to insure, they can legally deny you for the insurance services. Moreover, if you are already insured, and your driving risks have increased, your insurance policy might cancel—high driving risks such as claiming multiple insurances in a short period.
Whereas the credit scores show your credibility against premium payments, you are not reliable for premium payments if you have a poor credit score. Hence, a person might struggle to find an insurance policy if they have poor credit scores.
Other Reasons for Getting Denied for Car Insurance
Apart from your credit scores or driving history, insurance companies can deny insurance for other reasons. The insurance company can cancel your insurance if they found you have given wrong information or failed to pay your premium amounts on time.
The credit scores also decrease if you have missed multiple premium payments. However, it doesn’t mean it is impossible to have car insurance. To maintain or build your credit scores again by timely payments of credit cards or paying off loans, you also set up an automatic payment system for your monthly bills.
However, if you lie to your insurance provider, it might be considered a fraud, making it hard to get insurance. Your insurance company and DMV (Department of Motor Vehicles) work jointly for your driving history. Your driving or accident records are shared with your insurer through DMV. And once a person gets caught lying about their driving record, it might end in an insurance policy’s cancellations.
Can a Person With a Poor Driving History Get Car Insurance?
If you have a poor credit score or a bad driving history, it doesn’t mean you can’t have a car insurance policy. Many insurance agencies deal with high-risk drivers. In comparison to standard car insurance, high-risk insurance companies charge more. However, make sure they don’t have any hidden charges to compensate for the high-risk.
What to Do if an Insurance Agency Denies Your Car Insurance Application?
If an insurance company denies your insurance policy, apply to other insurers. Every insurance company has different criteria for evaluating insure applications. We recommend you discuss with your insurance agent, who might help you get an insurance policy.
If your insurance application gets rejected, you can make yourself part of another person’s policy, especially family or roommate. However, you and the policy owner must trust each other, as both are responsible for each other’s driving. If any one of you has an accident, then you might have to pay more.
Usually, auto insurance agencies allow you to share insurance policy only with your family member that doesn’t live with you or a person you live with. For instance, if you’re in college, you can add yourself to your parents’ insurance policy.
If you are denied car insurance for reasons you can control, make sure you resolve or minimize those issues to your benefits. Having speeding tickets or poor credit scores might lead to denying the insurance policy. Hence, we recommend addressing the problems under your control to get your insurance policy.