If a car insurance company wants to earn money, it needs to attract clients and insure as many vehicles as possible. While profit is significant, an agency might estimate that a particular insurance deal comes with a risk so big that it’s not worth it. Yes, a car insurance company can refuse to insure your vehicle. But why would that happen? In this article, we are focusing on the most frequent reasons why an insurance agency might reject your application.
You Have a History of Not Paying on Time
Have you already done business with that insurance company in the past, but they rejected your application now? If that is the case, the secret might lie in your payment history. Even if you missed paying on time because you honestly forgot, missing the deadline still counts. While most companies won’t have a problem with this happening once or twice, a more extended history of late payments might cause rejection. The good news is that there is a way around this. Most insurance agencies will offer you to pay the complete premium right away so that they can provide car insurance.
Your Vehicle Is Unique in Some Way
The car you drive might be different than the majority of vehicles that the particular company insures. If that is the case, they might be having problems calculating the premium. That could end up with your application getting rejected. The two most common examples of unique cars include:
- A high-performance premium vehicle – you might be a proud owner of a car worth over $400,000. However, providing insurance for your vehicle and covering expensive repairs might not be something that every company can handle. That is why you need to find an agency ready to insure high-valued vehicles.
- A classic car – these vehicles also have a high value, although their performance might vary. Either way, you need to find a company specializing in that type of vehicle. Not every insurance agency is willing to insure a classic car.
Poor Traffic Record
Insurance companies are ready to offer a no-claim bonus and other discounts to responsible drivers. However, if the driving history shows that they are dealing with an irresponsible user, they could reject their insurance application. Here is how a poor traffic record could lead to the insurance company refusing to insure your vehicle:
- You caused multiple road accidents – if you caused more than one major road accident, the insurance company will be very careful in choosing whether to accept the application. You can also expect higher premiums than usual.
- Traffic violations – a single speeding ticket won’t be a problem, but ten of them could get you into trouble.
- Other Serious Offences – driving under the influence (alcohol, drugs, etc.) is a major traffic offense. If you caused this on one or multiple occasions, your application might get declined.
No Driving License
If you don’t have a driver’s license, it means you can’t drive any car. A more frequent case is users who have their driver’s licenses suspended. Most companies will consider these users a high risk, and some might even reject their car insurance application.
Lies and Frauds
Another common reason for a car insurance application rejection might be that you lied when applying for the policy. It could be a mistake, and you might have provided false information by accident. If that is the case, contact the insurance company to sort everything out and get your policy. A more serious offense is committing insurance frauds in the past. If the company finds that you tried to get away with fraud, they might reject your application.