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Car insurance plans play an undeniably important role when it comes to driving in the UAE. As the law states, having a proper, valid car insurance plan is mandatory if you want to drive your car in the UAE. Keeping this in mind, things can get problematic if you end up facing car insurance cancellation in the UAE. While it is rare, car insurance policy cancellation at the provider’s discretion can happen.
If you are thinking, “well, that’s okay because I’ll just buy a new car insurance plan”, then stop and ponder for a moment. The reason car insurance cancellation is such a substantial matter is that it is exceptionally hard to get another one later on. One should note that providers always cancel insurance based on concrete data. As all insurance details are available to every provider for investigation, this is why it is crucial to understand the circumstances under which your car insurance gets cancelled and what you can do to save it.
Car insurance plans are your fall back options in the time of need. However, even though insurance plans claim to be there for you through every difficult situation, there are several instances when your insurance policy may stand null and void. All insurance companies lay out a set of conditions in their contracts outlining the terms of car insurance policy cancellation. While these terms differ for each provider, they also differ for each policyholder.
If you fail to comply with the terms of your contract or land in circumstances that present you as a high-risk candidate, there is always a chance of facing grave trouble like insurance cancellation. Given below are some of the common reasons that may lead to car insurance plan cancellation:
Having your car insurance plan suddenly cancelled is not a pleasant experience. Stress and panic are some of the things you may experience if you find out that your car insurance plan is being cancelled. However, while the insurance company will have its reasons clear before taking such a step, you may still have a chance to negotiate your way out of it. Negotiation won’t be an option if your plan is being cancelled due to reasons like fraudulent claims. At the same time, reasons like too many claims may still have a negotiation window. Try and speak with the responsible authority on the matter at your insurance company. Make your case and present strong points. If your case is genuine indeed, you may be able to persuade the insurance company to keep your plan running.
While there is no magic number here, what’s sure is that too many major claims from a policyholder may trigger a series of investigations from the insurer’s side. So if you think that making one less claim will save your plan from getting cancelled then you may be mistaken. If your insurance plan gets cancelled due to too many claims, the best thing you can do is conduct a self-examination of your previously made claims. Given below are the steps you can follow:
Once you have these things straightened out, contact the insurance company and make your case against car insurance cancellation. Explain what you have done to reduce the risk on your part. Have you been taking driving lessons? Installed an anti-theft device? Moved to a safer location where the risk of theft is lower? Get proper answers to these facts, as they will make sure that you can present hard facts to persuade the insurance company. If you manage to prove that you have made substantial changes to reduce risk, you may get your coverage sustained.
The business world thrives on the concept of loyalty, meaning that returning customers or the ones who have stayed with a provider for long usually get preferential treatment regardless of the type of business. You can use this concept of loyalty to your advantage when your car insurance cancellation is concerned.
If you have been a model customer from the beginning and the car insurance cancellation is not due to fraudulent claims, moral dilemma, etc., the insurer may consider your loyalty. It is true that the final blow will come down to the revenue, but showing that you have been a loyal customer for long before the unfortunate events began can be helpful to build your case. Point out that you have given enough business to the provider before the major claims issue began. The goal here is to make the provider aware of the revenue they have generated through you as a client.
The next order of business would be to find another car insurance plan as your fallback option. There is always a possibility that your provider may not budge even after all the valid points you have made to save your case. And since having a valid car insurance plan is mandatory to drive in the UAE, you must make arrangements to get another plan if your current insurance gets cancelled.
While you are waiting to hear back about the car insurance cancellation case from your current provider, be on the lookout for other options. You may get higher premium quotes from other providers since everyone takes the previous claim into account when offering insurance. If you have a solid case and reasoning for your previous claims, you may be able to get a new plan with another provider.
A key aspect here is that all insurance companies don’t prepare the same underwriting rules. This can give you the window to jump ship if things do not appear promising with your current provider. You can also consider taking your car insurance plan with brokers like Policybazaar UAE. As brokers like us work with multiple providers, getting another insurance plan would be easier for you.
However, just because you manage to get an alternative, don’t leave the fight to keep the current one. Give it all you have to save your current car insurance plan from cancellation. If nothing works out despite your best efforts, you will always have your other alternate plan to rely upon.
Ans: Yes, your car insurance premium may increase if your current insurance plan got cancelled. The hike in the premium you will get with your new plan will depend on many other factors though. Too many claims made previously, increment in risk factors, and condition of the car are some of these factors.
Ans: There is no pre-specified number of claims you can make before your plan gets cancelled. The idea here is the ratio of money spent in claim settlement and revenue generated with premium. Providers consider car insurance cancellation only after analysing the severity of the claims made during a certain tenure, generally 36 months.
Ans: No, it isn’t an underwritten rule to cancel every car insurance plan after an accidental claim. If the accidental claim concerned was of a substantial amount, the provider may simply decide to increase the premium upon renewal. However, if you have made claims of similar nature multiple times, the provider may consider cancelling the plan.
Ans: The ideal way to represent your defence is by proving that you have taken steps towards changing things. For instance, if you made too many theft claims in the past 3 years, show the steps you have taken to reduce the risk of theft. It can be the new anti-theft device you installed in the car or any other protective measure. If the car insurance cancellation is due to non-payment or late payment of premiums, demonstrate to the provider that you have become more responsible and stable financially.
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