Car Insurance has three parts. The first is damage to the vehicle or its theft when it isn’t in use. The second being to cover costs of accidents like repairs to the material car or damage to other cars and injuries to persons involved. The last facet includes the risk factor of the driver; i.e. the statistical likelihood for the driver to be involved in an accident.
Yes, an insurance company can certainly decline to insure your car. There are a number of reasons why this could happen. Check this out:
The Risk the Driver Represents
A driver with a bad moving record can be denied car insurance. For instance, a driver or drivers with a number of claims within a short period of time can cause an insurance company to refuse to cover their automobile. Insurance companies can even drop existing customers that are considered a bad risk.
Insurance companies are allowed to determine and refuse to ensure a vehicle if they determine that the risk of insuring a person is too high because of multiple moving violations and accidents.
High Value Vehicles
Even if you have a clean record, some insurance companies may refuse to cover certain classes of vehicles. Your typical insurance company may decline to insure a very expensive car. Check out supermodel cars to get a glimpse of what I mean. They would rather insure your multi-million home, your store or your typical fast car.
High performance vehicles put insurance companies at unnecessary risk. They may therefore decide to send clients to the assigned risk pool which distributes evenly (among other companies in the same pool) the policy along with other high risk policies.
Classic Cars
Also note that your insurance company may decline to insure your car if it is a classic car and its value is subjective. Have you attended a classic car auction? Of course you have. You will agree with me that these cars may not necessarily be insured for their purchase price. Your insurance company may only offer to insure the vehicle for its own assessed value but not its actual purchase cost. The appraised cost will therefore differ greatly from the purchase cost no matter the refurbishing costs that might have been put into the vehicle. There might be conditions too, that the car must be stored properly and driven selectively.
Demographic Area
Insurance Companies can also decline to insure your car(s) if they decide that they have insured too many drivers of a certain demographic area, zip code or age. They will therefore stop writing policies for their customers until when they will decide that they have brought the risk profile of the customers back to a level they are comfortable with. No one wants to make loses, what say you?
Don’t forget that insurance is about risks and managing the risks. Insurance Companies don’t want to be overly conspicuous when it comes to certain risks. It’s therefore necessary that they manage their exposure to unanticipated events. They will therefore decide to have a certain percentage of policies relative to their total number of policies in areas that may encounter natural disasters, for instance, like fires, earthquakes and floods because such threats can result in a very large number of claims coming in suddenly. In case they decide to write policies in such a locality, then they will be extremely strict on their underwriting standards so as to limit exposure to that area by having relatively fewer policies there.
Highly modified Vehicles
Are you a car maniac? Do you possess a heavily modified car? You may have a hard time finding insurance for highly modified vehicles like cars with high performance upgrades and vehicles outfitted for mobility purposes.
Rare Models
You might have a difficult time trying to find an insurance company that is willing to accept you if you have an incredibly rare model of an automobile like the Deloreans.
Lastly, the only reason why a policy may not be denied would be because of gender, race, ethnicity or sexual orientation, all of which are inconsequential issues. To be fine, talk to an independent insurance agent who can find you the type of insurance company that can readily accept to insure your vehicle.
