Blog

When it comes to driving in the UAE, car insurance coverage plays an undoubtedly crucial role. If you want to drive your automobile in the UAE, you must have a good, current car insurance plan, according to the legislation. With this in mind, if your car insurance in the UAE is canceled, things can get complicated. Car insurance policies can be canceled at the discretion of the provider, which is rare.

Car insurance cancellation is such a significant issue because it is quite difficult to obtain another one afterward. It is important to note that insurance carriers always terminate policies based on concrete data. Because every provider has access to your insurance information for inspection, it is critical to understand why your auto insurance is canceled and what you can do to avoid it.

When Can Your Car Insurance Policy Get Cancelled?

Car insurance policies are your go-to solution in an emergency. Although insurance plans claim to be there for you in every difficult situation, there are several situations in which your insurance policy may be rendered null and void. In their contracts, all insurance firms spell forth a set of stipulations describing the circumstances of vehicle insurance policy cancellation. While these terms vary by provider, they also vary for each policyholder.

If you fail to comply with the terms of your contract or land in situations that make you a high-risk candidate, you may face serious consequences such as insurance cancellation. Some of the most typical reasons for vehicle insurance plan termination are listed below:

Making Too Many Claims

This is the finale for all insurance plan claims. Making too many claims on your auto insurance policy, on the other hand, can be detrimental to you as a policyholder. At the end of the day, your provider is a business that seeks to earn income while minimizing its expenses. Too many claims by policyholders typically result in higher risks for the insurance provider. As a result, if you continue to make claims over the plan's assured amount maximum, the provider may decide to dismiss you as a customer.

Late or non-payment of your premium

Missing payments regularly, waiting until the last minute to pay premiums, or missing payment deadlines can all result in the cancellation of your vehicle insurance coverage. If your provider agrees to make an exception, car insurance cancellation due to a missing payment may be addressed. If you have a pattern of late payments, your provider may decide to drop you as a customer entirely. While a single missing payment may be viewed as an emergency or an accident, a pattern is generally overlooked.

Intentional Car Damage

As a car owner, you are supposed to take good care of your ride. In that perspective, intentionally causing damage to your vehicle and expecting your insurance company to cover it will result in auto insurance cancellation. It is not only unethical, but it also demonstrates that you are not a dependable and responsible car owner. Insurance firms will not accept such candidates as clients.

Major Life Changes

While changes are unavoidable, some of these changes are significant enough to influence your vehicle insurance policy. For example, if you have recently been diagnosed with an illness that affects your ability to drive, your insurance company may consider canceling your coverage.

Changed Risk Factor

The risk factor that you bring in as a consumer may alter dramatically even if nothing else in your life has changed significantly. For example, causing a large collision that causes extensive damage to both your vehicle and the third-party vehicle raises your risk factor and may result in the cancellation of your auto insurance policy.

Criminal Record

If it is discovered that the policyholder has a criminal record, the provider may cancel the car insurance coverage. Similarly, if the provider discovers the criminal record after selling a policy to the buyer, the coverage may be revoked.

Moral hazard

Moral hazard occurs when an insured person acts carelessly or takes additional risks while they are aware that someone else is safeguarding their interests. Driving irresponsibly because you have comprehensive insurance that will cover any damages is a prime example of this. If a policyholder is determined to have created a moral hazard, the insurance provider may choose to cancel their policy.

Making False Claims

Whether in the insurance industry or elsewhere, fraud is never tolerated. In most circumstances, filing a fraudulent claim against your insurance policy will result in auto insurance cancellation. There are various forms of fraudulent claims. Any immoral practice to obtain insurance claim settlement money is considered fraudulent, such as driving dangerously and purposefully damaging the car to have previously existing damages reimbursed by insurance.

Using a Personal Vehicle for Commercial Purposes

Personal vehicles are not intended for commercial use. This fact is reflected in automobile insurance, as personal car insurance plans are not suited to cover damages caused by commercial operations. Using your car frequently for hired carpooling, moving products, and other similar activities may result in car insurance cancellation.

Too Many Traffic Violations

Having too many violations on your driving record can result in your vehicle insurance being canceled. The UAE has strict traffic laws, with fines based on the severity of the offense. Furthermore, all violations are recorded on your record and can be examined by insurance providers at any time. Multiple violations portray you as a reckless or unskilled driver. In either case, you become a high-risk customer for the insurance provider.

How Can I Prevent Car Insurance Cancellation?

It is not a nice experience to have your auto insurance policy suddenly terminated. If you learn that your auto insurance policy is being terminated, you may experience stress and worry. While the insurance company will have a justification for taking such a measure, you may still be able to talk your way out of it. If your plan is being canceled for reasons such as fraudulent claims, you will not be able to negotiate. At the same time, reasons such as too many claims may still be subject to discussion. Speak with the person in charge of the situation at your insurance company. Make your case and highlight your strongest points. If your situation is legitimate, you may be able to persuade the insurance provider to continue your coverage.

How Many Claims Are Too Many? What Can Be Done Here?

Too many significant claims from a policyholder may result in a series of investigations from the insurer's side. So, if you believe that making one fewer claim will keep your plan from being canceled, you may be misinformed. If your insurance plan is canceled because you have made too many claims, the best thing you can do is perform a self-examination of your previous claims. The actions to take are as follows:

1. Keep track of how many claims you've filed so far, as well as the frequency for each tenure.

2. Examine the total money received so far for claim settlement.

3. Examine the primary claims and determine the root cause.

4. Look at what you've done to lessen the risk factor.

Once you've resolved these issues, contact the insurance provider and present your case for vehicle insurance cancellation. Explain what you've done to lessen your own risk. Have you been learning to drive? Have you installed an anti-theft device? Have you relocated to a more secure place with a lower chance of theft? Get correct responses to these questions because they will ensure that you can provide concrete data to persuade the insurance company. If you can demonstrate that you have made significant changes to lower risk, you may be able to keep your coverage.

What is loyalty worth in this situation?

The business world relies on the concept of loyalty, which means that returning clients or those who have been with a supplier for a long time usually receive preferential treatment regardless of the type of business. When it comes to vehicle insurance cancellation, you can take benefit of this concept of loyalty.

Getting a New Car Insurance Plan

The next step would be to look for another auto insurance plan to use as a backup. There is always the risk that your provider would refuse to budge despite all of your reasonable points. And, because having a valid auto insurance plan is required to drive in the UAE, you must make plans to obtain another plan if your existing one is terminated.

As you wait for your present provider to respond to your auto insurance cancellation case, look into other options. You may receive higher rate quotations from other carriers because everyone considers the previous claim when giving insurance. You may be able to get a new plan with another provider if you have a strong case and justification for your past claims.

However, just because you have an option, you should not abandon the struggle to maintain the existing one. Give it your all to keep your present auto insurance policy from being canceled. If nothing works out despite your best efforts, you will always have your backup plan to fall back on.