A policy cannot cancel if it has been in effect for more than 60 days unless under these conditions:
- The policyholder does not pay the premium
- It is found that the policy holder committed fraud, and/or misrepresentations were made on the application for insurance
- A revoked or suspended license of the policyholder
You or your insurance company can decide not to renew the policy at the end of its coverage date. Depending on the state you live in, your insurance company is required to give you a certain number of days prior to notice and an explanation for non-renewal before it ends your policy. In the event that you caused an accident, and raised the risk to the company, the premium may rise and you may not have your policy renewed.
A minimum amount of liability insurance is required in most states. The minimum state requirement does not cover most accident costs, therefore more liability insurance is recommended. If you do not have adequate insurance, then you will be legally responsible for bills that are more than your insurance covers.
Collision and comprehensive coverage is used to supplement your liability coverage. Your collision and comprehensive coverage is based upon the market value of your car and how much it would cost to repair it.
You will choose a deductible. A deductible is the amount of money you are responsible for paying out of the pocket before the insurance company reimburses you. A deductible can cost from $500 to $1000. A high deductible results in a lower premium.