• There are several reasons an insurance company may provide for dropping a policyholder from its rolls. These reasons can usually be categorized within one of five main groups. If you have not been given a reason, you may have legal avenues to argue against the company. All states have a department that handles insurance complaints, and you can file a grievance and obtain a hearing. At the hearing the insurance company must prove the reason the policy was canceled.
  
  

Nonpayment

• Nonpayment of insurance premiums can be a reason, as well as a sufficient number of late payments. Polices may have a grace period where the policyholder is still covered should payment be late. Late payments can be considered as nonpayment of premiums.
  
  

Fraud

• Fraud is defined as misrepresentation of facts or information, such as submitting false claims for payment, falsifying information to get initial coverage, or concealing information that would affect decisions about gaining or holding coverage. This includes not divulging medical information or previous legal actions that would normally constrict the ability to be insured. Violations of the terms and conditions of a policy fall within the guidelines of fraud and can also result in cancellation of a policy.
  
  

Suspension of Licenses

• Suspension of driving privileges or a working license (contractor or business) may be a reason as well. There are regulations in place within some states dealing with suspensions. Maine does not allow a cancellation of auto insurance within 180 days of the last renewal date. Notice of nonrenewal is the same as the insurance company dropping a policyholder.
  
  

Violations

• Excessive violations of applicable laws may also be cited. These would include speeding tickets, at-fault accidents or moving violations. Other violations for non-auto-related insurance can include theft, revocation of licenses or permits, or at-fault situations such as arson.
  
  

Pre-existing Conditions

• This reason is not legally binding but does happen. It occurs when a pre-existing condition is claimed against the policy or a claim is traced back to a pre-existing condition. This is one of the hardest reasons to defend against because proof must be given by the policyholder showing the process behind this reason.