Image: Speeding ticket © Corbis

It pays to stay on your car insurance company's good side.

Insurance is a contract: You agree to pay your premium and drive safely, and the car insurance company agrees to cover damages if you cause an accident.

So how can you get on your car insurance company's bad side?

If you:

  • Misrepresent yourself on your application. For example, if you say that you park every night in a locked garage but you actually park on the street.
  • File a fraudulent claim.
  • Get your driver's license suspended or revoked.

Those are the obvious ways. Though auto insurance companies can't just drop customers willy-nilly, most states allow them to drop people for a variety of other reasons, too.

Car insurance companies can drop you without your consent. Generally, during the first 60 days of a new policy, your insurer can cancel your coverage without providing a reason. During that period, the insurance company is reviewing your record and deciding whether it wants to accept the responsibility of insuring you. (To find out the acceptable cancellation reasons where you live, contact your state insurance department.)

Then the rules change

After the initial getting-to-know-you period, car insurance companies need valid reasons to cancel your policy. In addition to nonpayment and fraud, many states allow auto insurance companies to cancel your policy if your license is suspended or revoked. They can also cancel your policy if the driver's license of someone in your household is suspended or revoked. (Some states require that insurers maintain coverage if you agree to exclude coverage for the offending individual.)

There are other ways to get on an insurance company's bad side.

In addition to losing coverage because of too many accidents, it's also likely you'll lose your insurance if you get a drunken-driving conviction, because most states automatically suspend your license for an offense as serious as that. If you don't lose coverage altogether, consider yourself lucky, but expect your rates to increase.

In Florida, an insurance company can decide not to renew your policy if you have more than one at-fault accident. If you have three or more accidents, regardless of who is at fault, the insurer can decide not to renew your auto insurance policy. This is also true in many other states.

In California, car insurance companies can cancel your policy for nonpayment, fraud, misrepresentation or a "substantial increase in the hazard insured against," according to the state's Department of Insurance website. That typically means you let other people drive your car on a regular basis without telling your insurance company.

In Illinois, insurers can cancel your policy if they discover that you:

  • Violated the terms or conditions of the policy.
  • Didn't disclose all your accidents and tickets on your application.
  • Are subject to epileptic seizures or heart attacks and cannot produce a physician's certificate attesting to your ability to drive.
  • Have other physical or mental conditions that make you dangerous behind the wheel.
  • Were addicted to drugs in the past three years.
  • Were convicted of a felony or forfeited bail for a felony.
  • Were convicted of criminal negligence resulting in death, homicide or assault as a result of operating a motor vehicle.
  • Drove under the influence, were intoxicated in the vicinity of a vehicle you were in custody of, drove away from the scene of an accident without reporting it or stole a car.