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Unexpected ways to lose your car insurance

Everybody knows your car insurance could be canceled for a serious infraction like driving drunk. But what if it gets canceled because you didn’t wear a helmet while skateboarding? Or you own a company that makes firearms? Not likely, right?

Actually, these are two recent cases when motorists were told by car insurance companies that they no longer would be insured following events that, at least on the surface, had little or nothing to do with driving.

In fact, there are lots of unexpected ways people can lose their car insurance. One woman’s coverage was revoked because her husband’s driver’s license was suspended. A man’s policy was dropped when the insurance company couldn’t locate his sister-in-law’s driving records.

These are not your usual cancellations. According to the Insurance Information Institute, typical grounds for cancellation include failing to pay premiums on time, and having a suspended, revoked or expired license.

Several insurance companies didn’t respond to requests for information about unusual cancellations. Others declined to comment and referred questions to industry organizations.

The affected policyholders also could not be reached for additional explanations. For the most part, they described their experiences on anonymous consumer complaint boards or had them reported by news media.

But even without knowing the particulars of each case, these cancellations are credible. All of the situations described could be legal reasons for cancellation.

Can you really do that?

Many insurers, for instance, will cancel a policy if the policyholder gets too many traffic tickets. If helmet-less citations were recorded on a skateboarder’s driving record, it could trigger cancellation. According to FindLaw, if a bicyclist receives a ticket, it’s treated the same as a violation in a car.

The firearms maker lived in Montana, where state law allows cancellation if the insured vehicle is used to commercially transport explosives. While firearms themselves are not explosive, ammunition is.

The cases of the husband’s suspended license and the mysterious sister-in-law rest on similar policy provisions. In the first scenario, cancellation is allowed if anyone living in the same household as the insured drivers has his or her license revoked. This applies even if the person whose license is revoked has insurance with another carrier. Another typical policy provision says the policy can be canceled if someone at the same address has too many tickets or accidents.

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