There’s nothing worse than finding out your insurance policy has been canceled by your insurer. If it’s health insurance, this leaves you with medical bills. If it’s homeowner’s insurance, you may be left on your own to make repairs after a bad storm.
There are many reasons, lawful and unlawful, why your insurance company may cancel your policy. Let’s review some of those reasons together to determine what, if anything, you can do to get your coverage back.
Legal Reasons Why Your Insurance Company May Cancel Your Policy
One of the most common legal reasons why your insurance company may cancel your policy is your failure to pay your monthly insurance premium. Other reasons may include:
- Too many claims filed
- Significant changes in risk
- Intentional damage to one of your covered assets
- Fraudulent claims filed
In most states, the insurer must provide written notice of policy cancelations at least 30 days in advance. This gives you ample time to negotiate continued coverage or find a new insurance policy to help protect you and your assets. You’ll want to do what it takes to avoid a gap in your coverage.
Bad Faith: Unlawfully Canceling Your Policy
There are many cases where insurance companies will attempt to save money by canceling policies without a clear reason. This is known as acting in bad faith. Most of the time, this occurs after you submit a claim for legitimate damages.
To avoid paying you, your insurer may cancel your policy, stating there are faults that then make your claim invalid. Yet, when asked, they may not be able to clearly define those faults or what you can do to reinstate your policy.
What Can Be Done About a Wrongful Cancelation?
Your insurance company cannot legally cancel your policy for any reason that isn’t stated inside of your contract. If they do, they can (and should) be held accountable. First, we recommend calling your insurer to gather more information about the cancelation.
Next, consider reaching out to an attorney to help you file an appeal if you wish to reinstate your policy. Or, perhaps your attorney can help you file a lawsuit against your insurer, which may help you recover damages to pay your bills and for the suffering caused by the act of bad faith.
Has Your Insurance Company Acted in Bad Faith?
If you believe your insurance company has acted in bad faith or fear losing your insurance due to unfair insurance practices, an attorney can help. To learn more about bad faith, reach out to the attorneys at The Fell Law Firm by calling 972-450-1418 or send us a message.
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