Aug27

Reasons Why Your Auto Insurance Company Can and Can’t Cancel You

Reasons Why Your Auto Insurance Company Can and Can't Cancel You

People are often concerned that they will be cancelled by their auto insurer if they file a claim. When and how an auto insurer can cancel a policyholder is strictly governed by Florida law.

It is illegal for an insurance company to increase your premium, cancel or refuse to renew a policy solely because the insured was involved in a motor vehicle accident unless the insurer’s file contains information from which the insurer in good faith determines that the insured was substantially at fault in the accident. However, if the insurer increases the premium, cancels the policy or fails to renew it because it thinks that the insured was “substantially at fault in the accident,” the insurer must notify the insured in writing that he is entitled to reimbursement of such amount or renewal of the policy if the named insured demonstrates that the operator involved in the accident was:

  • Lawfully parked;
  • Reimbursed by, or on behalf of, a person responsible for the accident or has a judgment against such person;
  • Struck in the rear by another vehicle headed in the same direction and was not convicted of a moving traffic violation in connection with the accident;
  • Hit by a “hit-and-run” driver, if the accident was reported to the proper authorities within 24 hours after discovering the accident;
  • Not convicted of a moving traffic violation in connection with the accident, but the operator of the other automobile involved in such accident was convicted of a moving traffic violation;
  • Finally adjudicated not to be liable by a court of competent jurisdiction;
  • In receipt of a traffic citation which was dismissed or nolle prossed; or 17
  • Not at fault as evidenced by a written statement from the insured establishing facts demonstrating lack of fault which are not rebutted by information in the insurer’s file from which the insurer in good faith determines that the insured was substantially at fault.

In addition, an insurer cannot cancel or refuse to renew a policy if the insured has had only one accident in which he or she was at fault within the current three-year period. However, the insurer can refuse to renew a policy if while insured under that policy the insured has had three or more accidents, regardless of fault, during the most recent three-year period.

An insurance company cannot charge an addition premium or cancel or refuse to renew a policy solely because the insured committed a noncriminal traffic infraction unless the infraction is:

  • A second infraction committed within an 18-month period, or a third or subsequent infraction committed within a 36-month period.
  • A violation of s. 316.183, when such violation is a result of exceeding the lawful speed limit by more than 15 miles per hour.

If there is an increase in premium or cancellation or refusal to renew, the insurer and agent shall supply to the insured the complete proof of fault or other criteria which justifies the additional charge or cancellation.

Additionally, no insurer shall impose or request an additional premium for motor vehicle insurance, cancel or refuse to issue a policy, or refuse to renew a policy because the insured or the applicant is a handicapped or physically disabled person, so long as such handicap or physical disability does not substantially impair such person’s mechanically assisted driving ability.

No insurer shall, with respect to premiums charged for motor vehicle insurance, unfairly discriminate solely on the basis of age, sex, marital status, or scholastic achievement.

Nor can an insurer impose or request an additional premium for motor vehicle comprehensive or uninsured motorist coverage solely because the insured was involved in a motor vehicle accident or was convicted of a moving traffic violation.

Finally, no insurer shall impose or request an additional premium, cancel a policy, or issue a nonrenewal notice on any insurance policy or contract because of any traffic infraction when adjudication has been withheld and no points have been assessed. However, this does not apply to traffic infractions involving accidents in which the insurer has incurred a loss due to the fault of the insured.