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The insurance company is required by law to notify the policyholder at least ten days in advance if they decide to cancel a policy. This notice will inform the policyholder of the date when the policy will lose effect, and the reason for the policy cancellation. This grace period gives policyholders the chance to possibly resolve the issue, or seek out another insurance provider so their coverage will be continuous.

Insurance companies cancel policies for very specific reasons. Generally a policyholder is safe from cancellation unless their own driving behavior is questionable.

Unpaid bills are grounds for policy cancellation by the insurance provider. The insurance company has no reason to continue to provide you coverage if you cannot meet your bills on time. They usually bill you in advance. This problem can be addressed easily by making a phone call and resolving the bill right there and then.

Fraud is another common reason insurance companies will drop a policyholder. Insurance is a business that operates on the honor code; you trust each other to be honest in your dealings. Misrepresentation or fraud is a blatant disregard of that trust, and insurance companies will not take it upon themselves to provide protection for you if you cannot follow the agreement honorably.

The last most likely possibility for policy cancellation is when a driver has been deemed too dangerous to the company. Drivers who repeatedly receive violations and have horrendous records are high probability money holes. If an insurance company suspects it might lose money on your policy, they may cancel it rather than bleed money on your account. Accidents, tickets and DUI violations are all filed onto your driving record. If you have multiple violations within a very short period of time, the risk will become too great for an insurance company to willingly handle.

Your policy might also end if you get into an accident where your car is deemed totaled. If you get another car, you will have to take out a separate policy for that vehicle.

If your policy has been canceled, it is best to get insured again as quickly as possible. Other insurance companies will look at the length of policy lapse and may charge you more to reduce liability. Long gaps between insurance policies is not a good way to demonstrate how safe and responsible you are as a driver, because the companies will assume you have been driving without a policy.

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