Why am I being refused car insurance?

In the vast majority of instances, it’s up to insurers to decide who they want to cover. This can mean you’re refused car insurance for any number of reasons which can make the process stressful and disheartening. Here, we take a look at why you might be refused car cover and what you can do if you have.

Why am I getting refused car insurance?

Car insurance is at the provider’s discretion, so if they feel it’s too risky to insure you, they can refuse to cover you. That said, insurers generally won’t reject your application for cover unless they have good reason to, and refusals are usually because you’ve had a policy cancelled or voided by an insurer in the past.

What does it mean if a policy is cancelled or voided?

A cancelled or voided policy essentially means it’s as if the policy never existed. That means you won’t be covered and won’t be able to drive (until you can arrange another policy).

It also means that if you try to make a claim, and your insurer decides to void the policy, then they can refuse to pay out. This would leave you responsible for covering repair bills and compensation for other drivers.

Why do insurers cancel car insurance?

As a general rule, insurers will only cancel your car insurance if they feel you’ve broken the terms of your contract, often it’s down to:

Non-disclosure

Non-disclosure is when the information you give your insurer isn’t correct or is incomplete. It’s tricky because non-disclosure can be completely unintentional and could be as simple as switching jobs and forgetting to tell your insurer. With that in mind, it’s really important to remember to update your insurer if anything changes, for example if you:

You should also bear in mind that when insurers ask you about any previous claims, they can verify your answers using data kept on a central database. If it later transpires that you’ve forgotten to tell them about an incident and want to make a claim, they’re within their rights to cancel your policy.

From an insurer’s point of view, it doesn’t really matter if non-disclosure is a genuine mistake or not, the result is the same and could leave you without cover.

Non-payment

If you’re paying for cover in monthly instalments, your insurer can cancel your policy if you miss any payments. In most cases, this would mean you’ve missed several repayment dates rather than just one, but insurers will work to their own guidelines.

If you think there’s any chance that you might not make an instalment, speak to your insurer. In the vast majority of cases, they will be sympathetic and work with you to create an affordable payment plan. What you absolutely shouldn’t do, is do nothing and hope the problem goes away.

Fraud

Most of us associate insurance fraud with scams like crash for cash or flash for cash, where criminals intentionally cause an incident that results in a claim.

However, fronting is another type of very common insurance fraud. It’s when an older or more experienced driver says they’re the main driver when they’re not, in order to get cheap car insurance. When in reality, the main driver is a younger, more inexperienced driver who would typically pay considerably more compared to the average.

Is it hard to get car insurance if a policy is cancelled?

It can be trickier to find car insurance if you’ve previously had a policy cancelled by an insurer. That’s not to say it’s impossible as there are several specialist providers that will offer cover, but you can expect to pay more compared to drivers who haven’t had a policy cancelled.

How long do I need to keep declaring a cancelled policy for?

When you apply for car cover, insurers will usually always ask if you’ve had a policy cancelled or voided in the past. Crucially, there is no time limit, and you will have to declare any cancelled or voided policy no matter how long ago they occurred.

What are my options if I’m refused car insurance?

If an insurer has refused you car cover, don’t worry. Don’t assume that this will be the case for every other provider as they all work to their own conditions. Don’t forget, there are also specialist providers who specifically work with convicted drivers and drivers who have had cover cancelled.

Whatever your circumstances, the most effective way to find car insurance, is to compare what’s available. You can start a car insurance comparison right here, or find out more about car cover in our motor insurance hub.