Q: Auto insurance cancelled. Was this legal? Can they reinstate policy?
Thought someone was in an accident using my car so I opened up a claim form online but didn’t complete it because it turns out they weren’t driving my car. Several months later my insurance sends email to my 82 yo mom (policyholder) asking for information re. an accident claim. I told her I wasn’t in an accident and it’s probably a phishing scam. Later she received a letter threatening cancellation. Apparently claim was auto assigned without my knowledge and without any info. She responds prior to cancellation date telling them to cancel the claim because there was no accident and to contact me. Policy was cancelled anyways 1 mo before renewal date. I’m unable to register my car. Insurer will open new policy but requires a bunch of paperwork and review will take at least 20 days. Are there any laws that preclude retroactive reinstatement of a policy that has since expired? This is a major blemish on my record for failure to provide info on something that never happened. What can I do?
A:
1. Insurers have the right to cancel a policy if there's a valid reason, but the circumstances here may raise questions as to whether this cancellation was proper. You may have the right to challenge it.
2. Retroactive reinstatement is generally not favored under California law, but each situation is unique, and it may depend on the specific terms of the policy and other surrounding circumstances.
3. To resolve this situation, you might consider promptly communicating with the insurance company, outlining the situation, and if necessary, consult with or hire an attorney experienced in insurance law in California to represent your interests.
Sincerely,
James L. Arrasmith
Founder and Chief Legal Counsel of The Law Offices of James L. Arrasmith
A:
You can't register the car because you have no insurance. The solution is for you and your mom to get the car insured with another company.
Frankly, your insurance company was, (in my opinion), well justified in canceling the policy. Reporting an accident, and then saying it didn't happen is awfully fishy, and it raises a big red flag about the desirability of insuring such a person. Your story simply makes no sense.
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