Blog My insurance policy was cancelled….why?

What do I need to know about a making travel insurance claim?

There could be many reasons why an insurance company might cancel someone’s policy. By knowing the potential reasons, you can avoid them from happening to you. Here are the top few reasons why an insurance company might decide to cancel your coverage:

  • You neglected to pay your premium. Non-payment is the usual reason insurance companies will cancel a policy. Just like any other service, not making payments can result in loss of that service.
  • Under your current policy, you are no longer eligible for that coverage. Often this may be out of your control, such as if you no longer meet the eligibility criteria set out by the insurance company. For example, if the company decides to change what types of dwellings they are willing to insure, this could make you ineligible under their new guidelines. Or, it could be caused by your own behavior. For example, major traffic violations, such as drunk driving, that cause you to lose your driver’s license could prompt your insurer to cancel your policy.
  • You failed to inform your insurance company of an important change. A “material change in risk” is a change that would affect your eligibility for coverage or change the kind of coverage you need. For example, if you decide to leave home to travel for a year and you rent out your home during your absence, then that is a material change in risk. It is no longer your residence but a rental property. If you don’t advise your insurance company of this change, any claim could be denied and your policy cancelled.

If your insurance policy is cancelled, or the insurance company decides not to renew your policy, you could be left with no coverage until you find a new insurance company to insure you. If you leave yourself without coverage, this could affect any loans you may have, such as a mortgage or car loan, since having insurance coverage is normally a condition of having obtained the financing. Losing coverage could even prevent you from driving since it is illegal to drive a car with no insurance. In addition, an insurance policy cancellation may make it more difficult for you to find a new insurance provider willing to give you coverage. It may also cost you more in premium.

To avoid these problems, prevent a policy from being cancelled by:

  • Paying your premium on time.
  • Giving your insurance broker and company all the correct and honest information when you apply and/or renew coverage.
  • Informing your insurance broker promptly of any changes in your situation that could affect your insurance coverages.

Call your broker whenever you have questions or need to make any changes to your policies. Your broker can also guide you through the process of securing new insurance if you have already had a cancellation or if your current policy is not being renewed by your insurance company.


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