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The 7 Most Terrifying Car Insurance Words

Insurers will charge more to customers who need SR-22 forms due to the increased risk of claims, says Jim Whittle, assistant general counsel and chief claims counsel of the American Insurance Association.

The time your SR-22 will remain in place varies among states, but it's usually three to five years. The only path to lower car insurance premiums is "time and driving well," says Peter Moraga, spokesperson for the Insurance Information Network of California.

3. Canceled

If your insurance policy is canceled, it's like "a double-whammy" says Adler. Not only have you lost your policy, you will no doubt have to pay a higher rate in order to get another carrier to sell you a policy. Policy cancellations are red flags that signal high risk.

"If a person is canceled, they have to disclose it on the [policy] application," Adler says. When the underwriter sees it, "They will assume you were canceled for a good reason."

Reasons for cancellation include habitually failing to pay your premium on time, misrepresenting facts on your application, or having yourself or a member of your household lose driving privileges because of an expired, revoked or suspended license.

To avoid cancellation, ask if your insurer will maintain your coverage at a higher rate, Adler advises. That may seem unfair, but it's better than having the policy canceled and trying to find a new insurer, he says.

Missing one payment won't automatically result in cancellation, says Moraga. "Sometimes people will forget to pay the bill, get a notice and immediately be reinstated. And in most cases, you won't pay more."

Here are details on the difference between cancellation and nonrenewal of car insurance.

4. Nonstandard

If your driving record leaves a lot to be desired, you may be forced to purchase auto insurance from a "nonstandard" carrier.

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