On what grounds can an auto insurer drop their insured?

My car was hit in a parking lot by someone. I had just gone into the store and there was a passenger sitting in my car at the time not driving. My insurance company just notified me that they are dropping me and all other quotes are now double what I was paying. When I asked them why they are dropping me, being I have never made a claim with this company, and they say it is because the person that was sitting in the car had just received a DWI. Does this sound accurate/legal?

Asked on November 13, 2012 under Insurance Law, New York


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

This makes no sense and does not appear to be legal unless what the insurance company is getting at is you committed a fraud. In other words, the insurance company may be stating you wre not driving but the other person actually was and therefore is dropping you.  You can do a few things now. You can sue the insurance company directly which can be costly or you can file a consuner complaint with your state's insurance department and ask for review of this file under an unfair and deceptive trade practice theory and bad faith coverage. You may wish to obtain a copy of the store's outside videos if it had one to see if the license plate of the person who hit your car can be identified.

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