Accident Insurance

Reader’s Question:

Does the insurance company have the right to cancel my car insurance and accident health insurance policy and take my car if it is totaled?

Mark

Honolulu Hawaii

Generally, whatever is stated or specified in your insurance policy, an insurance does not possess any rights whatsoever unless stated otherwise by your state’s insurance regulatory entity. The laws and procedures regarding accidents such as accident health insurance and car insurance accidents differs from state and insurance companies.

If they declare a total loss on your car then the company will decide if the insurance reimbursement will be for the total loss or just for the repairs only. You are left with two options, to let them pay for the total loss and they will confiscate the car or you can take the money they will offer and pay for the repair yourself, but if they total the car, this option is not available. However, you may negotiate for a price with the company but it should be less than the totaled car.

The insurance company cannot cancel your policy simply because your car is totaled. But if you have made multiple claims and has had numerous accident histories, the company has the right to evaluate and cancel a policy. They can also do this in the event where your car is no longer insured.

There are also laws that protect policyholders that will protect them from unfair cancellation of policy in which case they may have to option to offer you to renew your insurance.