10 Reasons Your Car Insurance Won’t Cover You

Did you know your car insurance company has the right to deny coverage in certain situations? Some items on this list are simply not covered while others will leave you with a voided car insurance policy. You may receive advance notice or have none at all – it all depends on the situation and your insurer. Most of these items are easy enough to avoid by being honest, communicating and ensuring you’re educated about your auto insurance service

Here are 10 reasons your car insurance won’t cover you:

  1. Failing to make payments
  2. Criminal convictions.
  3. Abuse to insurance company representatives.
  4. Inability to provide a salvage or car inspection.
  5. Lying on an application or failing to complete it.
  6. Using your personal vehicle for commercial purposes.
  7. Illegal activity.
  8. Lying during a claim.
  9. Not informing your broker about a change.
  10. It’s explicitly excluded in your policy.

These seem pretty straightforward, but it’s not exactly so simple. For example, you likely won’t be cancelled if you’re a day late on a single payment. We’ll discuss each item in detail below. Keep in mind that each item might vary by the insurer, as every insurance company is different.

1. Failing to Make Payments

This one is pretty straightforward. If you fail to make your auto insurance payments, your policy will be cancelled. Generally, you’ll get a warning that you’ve missed a payment and have some time to get it paid before your policy is cancelled. However, this can depend on the insurance company and if you’ve missed more than one payment. 

Contact your broker if you need to change your payment date or payment method, as there are usually different options available to you.

2. Criminal Convictions

If you’ve been criminally convicted with a charge relating to driving or have a severe traffic safety ticket, you may no longer be eligible for coverage. You may still be able to get car insurance, but you may need to go to a specialty insurer and/or pay significantly higher fees.

3. Abuse to Insurance Company Representatives

If you’re abusive to staff of the insurance company, you could find yourself without car insurance. While insurance and claims can be frustrating, there’s never any need to be abusive. 

4. Inability to Provide a Salvage or Car Inspection

In certain situation, your insurer will request a salvage or car inspection report. If you fail to provide it, your policy could be voided and any claim denied. 

5. Lying on an Application or Failing to Complete It

When you submit an application for car insurance, you must answer honestly and complete it fully in order to be eligible for coverage. If you fail to complete it, your policy may not be issued which means you won’t be covered. The insurance company will likely send it back for you to complete. 

If you lie on an application, your car insurance could be voided if the misrepresentation is discovered. This is also considered to be insurance fraud.

6. Using a Personal Vehicle for Commercial Purposes

A personal vehicle can be used for commuting, but as soon as it’s used for commercial purposes, you need a commercial vehicle insurance policy. Commercial purposes includes:

  • Delivering or transporting passengers or goods
  • Registering the vehicle in a company’s name
  • Installing work-related equipment on your vehicle
  • Visiting clients or worksites
  • Letting employees drive your vehicle

If you’re not sure if you need commercial vehicle insurance, talk to one of our brokers. They’ll be able to advise you if you need this coverage or if your personal policy will suffice.

7. Illegal Activities

If you’re involved in an accident or your vehicle is damaged as a result of your own criminal or illegal activities, you likely won’t have coverage. 

8. Lying during a Claim

Lying during a claim can result in a portion or even the entire claim being denied – if the misrepresentation was severe enough, your car insurance policy can also be cancelled. Lying during a claim includes:

  • exaggerating the damage
  • claiming pre-existing damage was part of this claim
  • lying about the circumstances of the accident
  • intentionally damaging your vehicle

9. Not Informing Your Broker About a Change

It’s important to keep your insurance company up to date for major changes, as otherwise you may find out you don’t have coverage. This includes:

  • Changing a vehicle (if you buy or sell a vehicle)
  • Change of address
  • Change in use (commuting, using it for work, driving greater or fewer kilometres, et cetera)
  • Someone else is regularly driving the vehicle (or someone has moved in with you and is driving the vehicle)
  • Contact information
  • Payment information
  • If your vehicle is damaged (even if you’re not making a claim)

Not only does this ensure that you’re properly covered, but it also means that your insurance company can reach you if they need to. 

10. It’s explicitly excluded in your policy. 

Car insurance won’t cover everything. Exactly what’s covered depends on your coverage options and your car insurance provider. For example, if you only have third party liability insurance (mandatory in all provinces in Canada) and you’re at fault in an accident or a wind knocks a tree onto your car, the damage to your vehicle won’t be covered. 

It’s also important to know that personal property in your car won’t be covered by your car insurance – it will be covered by your home or condo or tenant’s insurance. 


Want to know all about Auto insurance quotes? don’t miss our full guide for Auto insurance.


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