Is it legal for an insurance company to cancel your policy before they pay for the claim because you did not sign a form for 15 and over in house ?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Aug 15, 2010

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Insurance Question from Chatt Hills, GA

Asked on 08/15/2010

Is it legal for an insurance company to cancel your policy before they pay for the claim because you did not sign a form for 15 and over in house ? DETAILS ABOUT THIS WERE ALREADY SENT. SON THAT HAD 2 ACCIDENTS IN ONE DAY.

Answer given on August 21, 2010

An insurance company can cancel a policy if they feel there has been an “increase in hazard”.  Your failure to advise of the driver is probably not a valid reason.  However, the two accidents in one day by an inexperienced driver can be considered such an increase, so they can cancel the policy.  Each state has its own rules on when a policy can be cancelled – mid term or at renewal.  You’ll need to determine if the cancellation was properly done.

The cancellation of the policy does not mean the company will not settle the claim. There was insurance in force at the time of the accident, so they must complete the investigation and settlement of the claim.  Discuss this with the adjuster and/or your agent so you can understand how the claim is being handled.

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