Under What Grounds can an Alabama Car Insurance Policy be Canceled?

state of AlabamaThe state is very particular under what ground an automobile liability policy may be canceled. One of the most lenient factors which allows an insurer to cancel the coverage of a policyholder is due to nonpayment of premium, but there is a particular rule that must be followed prior to the cancellation.

Prior to discontinuing protection, an insured must be given at least ten days notice, at which point the policyholder may be able to make the payment to avoid the disruption in coverage or allow the cancellation to take place. Motorists should keep in mind that there is no grace period and if the decision is made to pay the premium, the days left unpaid prior to payment will be considered uncovered by the policy.

All other grounds for termination require at least a twenty day notice and the cancellation must be in accordance with the Alabama auto insurance laws set by the state. There are numerous reason that allow carrier to lawfully terminate a contract, and they mainly have to do with the driver and automobile insured. If a policy has been obtained through a material misrepresentation, or have failed to disclose motor vehicle accidents and traffic violations on an application.

In addition, being involved in criminal activity can be almost a sure fire way to get a car insurance policy terminated such as filing a fraudulent claim or aiding another in doing so. Additionally, policies can be terminated if any of the following apply within 36 months prior to notice of cancellation;
  • Insured is convicted of driving while under the influence of drugs or alcohol
  • Driver's license has been suspended or revoked
  • Has developed an addiction to drugs
  • Convicted of a felony
  • Convicted of criminal negligence resulting in death, homicide or assault with an automobile
  • Fleeing the scene of an accident
  • Making false statements in a driver's license application
Other aspects that can be a valid cause for auto insurance companies to cancel a policy is if a person is subject to epilepsy, heart attacks, or has a physical, mental or other condition that could endanger the safety of the public while operating an automobile.

Alabama with blue backgroundAn insured vehicle can also be the cause of coverage cancellation; if an automobile becomes mechanically defective and may endanger public safety, policies may be terminated and if the vehicle is being used for carrying passengers for hire, is transporting flammables or explosives or is an authorized emergency vehicle, termination may apply.

There are a series of reasons in which policies may be terminated by the carrier, but if an individual feels that coverage has been canceled without just cause, the Alabama Department of Insurance should be contacted to ensure the cancellation is within legal grounds.

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