My car insurance policy was cancelled over a year ago. I am having a hard time finding insurance. Why is that?

A cancelled policy is a red flag to insurers, indicating the customer in question could be a bad risk. State insurance laws spell out the circumstances in which a car insurance company can cancel a policy. Among the most common reasons:

• A driver on the policy loses driving privileges because of a license suspension, revocation or expiration.

• The policyholder misses a premium payment.

• The policyholder misrepresents facts to the insurance company, such as driving history, claims history or the number of people who regularly drive the car.

If you were cancelled because you didn't pay the premium on time, you might be able to get insurance again through the same insurer if you otherwise had a good record. But the insurance company might require that the entire premium be paid up front if there's any history of missed payments.

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As you probably know by now, many car insurance companies ask prospective customers if they've been canceled within the last three to five years and then decline to provide insurance when the answer is yes. Car insurance companies also take a hard look at any customers who have allowed their car insurance to lapse for more than a few days. Why? Historic claims data shows that people who drive without coverage tend to submit more claims once they do have insurance.

That doesn't mean you're completely shut out of the market, but you are what's known as a "high-risk" customer. Some car insurance companies take on high-risk customers, but at a higher price. Continue to shop around and compare whatever car insurance quotes you can get. Don't go without insurance if you're still driving, or you could face stiff penalties if you get pulled over by a police officer for a traffic violation and your uninsured status is discovered. You also could face financial disaster if you caused a serious accident and don’t carry insurance.

For more, see the difference between cancellation and nonrenewal of car insurance.