Reader’s Question:

What does it mean when you say “binding period” in an auto insurance policy? My sister seems to worry too much because she said that her auto insurance can be cancelled because of her DWI charge here in Anchorage, Alaska especially that she’s still within the binding period.

Vince

Anchorage, AK

Your sister has all the reasons why she has to worry about her auto insurance. Every one of us does not want to hear that our policy has already been cancelled. Finding that our auto insurance company has decided to cancel out our auto insurance policy is no picnic. Having a cancellation of auto insurance policy can have an inconvenient insurance future.

Any auto insurance company has the right to cancel your sister’s auto insurance policy at any time and for any reason during the “binding period.” The “binding period” would be the time frame after her application in which the auto insurance company determines her risk and this is typically 60 days. If an auto insurance company cancels your sister’s policy, that could mean that it has found a blemish on either her driving record or credit record that makes you an unacceptable risk. In her case now, that would be because of her DWI charge in Anchorage, Alaska. But she can still be able to get a better deal for her auto insurance. You can advise her to check out her options and tell her she can get an online rate quote from this website.

Tags: auto insurance, auto insurance quotes, DWI, DWI insurance