Can Your Insurance Provider Cancel Your Policy if You Fail to Change Your Address?

Imagine getting an unexpected piece of correspondence from your insurance company. You’re asked to update your address on a short deadline. You do as they ask, even though there are no changes. You send out the required form by registered mail before the date.

But they cancelled your policy anyway, saying they didn’t receive the paperwork in time. Can your insurance provider do this? As it turns out, the answer is yes. A consumer in Ontario faced this scenario, and his situation might not be unique.

Auto insurance companies have several rules they follow that allow them to deny insurance or cancel a policy. These are called underwriting rules. In Ontario, there is also legislation that puts the obligation on the consumer to keep their insurance provider informed. Here’s what that means for you and your auto insurance coverage.

What are underwriting rules?

Underwriting rules are policies that determine whether an insurance company will sell you a policy or keep one in place. The specific rules are different from company to company. Some common ones are refusing coverage because of poor accident history, past non-payment of premiums, or past failure to give full information in an insurance application.

In Ontario, every auto insurance provider must have its underwriting rules approved by the Financial Services Regulatory Authority of Ontario (FSRA). That means they can’t make up rules on the spot, but there may be limitations that surprise you, nonetheless. That could include things like losing your coverage because a form arrived late to the insurance provider’s office.

The underwriting rules are just the beginning of the legal regime that surrounds car insurance. Ontario law also limits when an insurance provider can cancel auto insurance under the Compulsory Auto Insurance Act (CAIA). That legislation puts restrictions on the insurance provider and a greater burden on the consumer to uphold their part of the bargain.

What are other legal obligations?

The Insurance Bureau of Canada describes insurance as a “two-way contract,” where both parties have certain rights and responsibilities. For the individual, that includes providing accurate information and updating your information. You also have to report claims as soon as possible, and in return, the insurance provider should handle your claim promptly.

According to the CAIA, your insurance provider may cancel coverage if there is a “material change of risk” or if you fail to pay premiums. Giving false information or withholding information might also lead to contract termination. Make sure to read all correspondence from your insurance company, let them know when something changes, and pay those premiums on time.

What if you disagree?

Losing your auto insurance over what seems like a technicality can be upsetting. Fortunately, you can take steps if you feel you have been treated unfairly. You can file a dispute with your insurance company’s complaints officer to discuss the issue. If it’s not resolved, you can file an official complaint with FSRA.

Discover your options for auto insurance

It’s great to have a positive relationship with your insurance provider. But it also doesn’t hurt to shop around to see what else is out there. Compare auto insurance quotes from more than 30 providers in a single search at 

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