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While all insurers tell you the benefits of their auto insurance coverage, it’s equally informative to know the situations when they may not cover you.

Most of them are easy enough to avoid with proper communication, being honest and making sure you know the ins and outs of your policy. Sometimes things are simply not covered. Other times, your insurance can be cancelled for other reasons.

A cancelled auto insurance policy leaves you financially vulnerable and reflects poorly on your record. And, driving uninsured is illegal and can lead to fines, tickets and even your licence being revoked. It can also mean higher insurance costs on any future policies.

Here are some situations when your car insurance may not cover you or your policy could be cancelled:

1. Missing payments: This one’s pretty straight forward. If you fail to pay your auto insurance premiums, it’s not hard to understand that your policy will be cancelled. Most insurers will warn you that you’ve missed a payment and you can subsequently pay. However, this can depend on whether you’ve missed more than one payment. Remember, if you need to change your payment date or how you pay, you should contact your broker.
2. Criminal convictions: If your driver's licence is forcibly suspended or revoked for any reason, your insurance company may cancel your policy. Even a severe traffic ticket may affect your eligibility to be covered. That being said, you still may be able to get auto insurance through a specialty high-risk insurer, but your insurance will cost much more.
3. Fraud/Lying about a claim: If you lie during a claim, it can have serious consequences. It can result in a portion or even the entire claim being denied. If the misrepresentation is severe enough, your car insurance could be cancelled. Examples would be if you exaggerated the damage, claim pre-existing damage was part of the claim, lie about the circumstances about the accident or intentionally damage your vehicle. Fraud is committed when someone deceives an insurance company for financial gain. If the insurer spots it, your policy can be cancelled and, in some cases, criminal charges can be laid.
4. Lying on an application: When you apply for car insurance, you have to fill out an application. You must answer the questions honestly and complete the entire application in order to be eligible for coverage. However, if you lie on your application and it’s discovered, your policy could be voided.
5. Too many claims: An auto insurance company in Ontario, for example, can drop you for having too many claims, but can only do so at your policy renewal time.
6. Using a personal vehicle for commercial purposes: While you can use your personal vehicle for commuting to work, you cannot use it for commercial purposes. That includes delivering or transporting passengers or goods; registering a vehicle in a company’s name; installing work-related equipment on the vehicle, visiting clients or worksites or letting employees drive your vehicle. If you are using the vehicle for any of these purposes, you need a commercial policy. If you don’t know, contact your broker. They can advise you if your personal policy is the right kind of coverage.
7. Not informing your broker about changes: It’s important to inform your insurance company about changes. These include such things as buying or selling a vehicle, changing your address, payment information or if someone else is regularly driving the vehicle. Another reason, for example, could include a change in use such as if you’re using it to commute to work and are driving more or less kilometres. Keeping this information is up to date makes ensure you are properly covered and that your insurance company can reach you.
8. Illegal activities: Should you be involved in an accident or your vehicle is damaged because of your own illegal activities, you likely won’t be covered.
9. Health reasons: In some cases, coverage may be cancelled if a driver is diagnosed with a certain medical condition that makes them an unsafe driver.

10.Change in risk: if you’ve become a higher risk since you first started with your insurer, it has the right to cancel your policy if it believes that the risk of insuring you and/or your vehicle has changed significantly. An example of where this could happen is if you’ve accumulated a lot of traffic tickets or made several expensive or at-fault claims.

11.Failing to comply with inspections/safety certificates and orders: In provinces with public auto insurance (B.C. and Saskatchewan) if you don’t comply or safety certificates are considered unsatisfactory, your policy can be cancelled.

12.Policy exclusions: What your auto insurance covers depends on your policy. An example would include if you only have third party liability (mandatory in Canada) and in you are in an at-fault accident. In addition, personal property in your car won’t be covered by your auto insurance, it will be covered by your home, condo or tenant’s insurance.

A good rule of thumb is when you don’t know if your policy covers something, speak with your broker. And, always be honest with your insurer.