What could go wrong you ask? Well, everything! Even if you're the most careful driver on the road, other drivers aren’t always so careful and could crash into your car. Your car is always at risk of being stolen or hijacked. The wise thing to do is to cut back on unnecessary costs or chat to your service provider about what options are available to reduce your premium, rather than just cancelling your cover.
- Murphy’s Law
Thanks to Murphy, you’ll always need to claim, almost immediately after you have cancelled your car insurance. And that’s only the top of the long list of things that could go wrong.
- Times may be tough, but they’re also unpredictable
Accidents do happen. So, what happens if you collide with somebody else? How will you pay for third-party claims against you? Insurance – that’s how!
- You could pay more on future premiums
Cancelling your current insurance policy could affect your premiums in the future. Your insurance history counts, and it can affect your future insurance quotes. Someone with a 6-year history qualifies for a more affordable rate than someone with a 1-year history. Continuous cover history matters too, meaning that you may go back to a 0 to 1-year history if you decide to cancel your insurance for a few months.
- High-risk, low-reward
If you stay insured and keep your claims to a minimum, you can build a low insurance-risk profile. Insurers love low-risk clients and reward them with better premiums. On the other hand, you could become a high-risk client if you keep cancelling your car insurance. Which means, insurers could charge you higher premiums.
- You could struggle to get cover again
The more you cancel your vehicle insurance, the more high-risk you become. Some insurers could go as far as to decline your application if they consider you to be too high-risk.
- It could cost you more than you save
If you are involved in an accident, you might be liable to pay for all damages (to your car and the other person’s) out of your own pocket. Future insurance quotes could be higher than what you are currently paying as well.
- You could be left paying for a car you don’t own
Theft, fire, and hijacking are three events that can happen to anyone at any time. They’re often just a case of bad luck. You could lose your car and still owe the bank if your car isn’t paid-up.
- You could be found in breach of contract
If your vehicle is financed by a bank, you could be in breach of contract. Almost every car financing agreement requires the owner to have a comprehensive car insurance policy while the outstanding amount is being paid off. If you cancel your car insurance, you could be violating the terms of your financing agreement and your mechanical baby may be repossessed.
