How to Get Car Insurance After a Policy Cancellation
What happens when car insurance is canceled?
If you’re considered a high-risk insurance client, most companies will insure you and your vehicle — but it may come at a cost. If a higher premium won't cover the risk, your insurance company could cancel your policy outright.
The tricky part is what comes next: many companies have the same guidelines that dictate to whom they will sell insurance coverage. If GEICO cancels your coverage because you’ve had too many claims, you might not get able to get coverage from Progressive for the same reason.
Let's look at some common reasons an insurance company might cancel a policy and the steps to take in search of an affordable insurance policy.
Why do car insurance companies cancel policies?
An insurance company may drop a client if the driver violates the stated terms and conditions of the policy.
Below are some common circumstances in which an auto insurance policy could be canceled:
- License suspension
- DUI/DWI
- Unsafe driver with frequent insurance claims
- Expensive claims payouts (especially bodily injury or medical payments)
- Owning high-performance or altered vehicles
- Failure to provide documentation
- Nonpayment
- Any combination of the above
Minor infractions may not trigger insurance policy cancellation. Forgetting to sign a document may result in an insurance company reinstating coverage after the oversight is addressed.
If, however, a driver fails to turn in documentation of previous insurance history because they don’t have any insurance history, it could result in denial of coverage. Many companies require customers to carry six months of continuous coverage to be eligible for a policy.
Car insurance cancellation laws: is it legal for an insurance company to drop coverage?
Although auto insurance is required in nearly every state, an insurance company has the legal right to cancel a policy if the insured driver violates the terms and conditions stated in the original contract.
If a driver breaks policy guidelines, the insurance provider may act within its legal rights and self-interest to deny coverage at the time of policy renewal or cancel the policy immediately. At this point, the burden of finding a new car insurance policy falls on the driver.
What to do after auto insurance is canceled
You have a few options after your coverage is revoked. First, get a clear answer as to why your policy was dropped. If it was a result of a minor infraction such as a missed payment or failure to turn in a document, the company may allow you to restart your coverage.
If your policy was canceled and you’re unable to reestablish it, consider a non-standard car insurance company. Many major insurance companies carry the same thresholds for uninsurability. Meaning, if Progressive issued you a non-renewal because of your frequent claims, Allstate might not issue you a policy for the same reason. However, non-standard companies might be more willing to insure you despite your driving record.
A non-standard auto insurer is an insurance company specifically designed for drivers with high-risk rating factors. Bear in mind non-standard companies might not offer the same level of coverage you once received through a major insurer. This could mean coverage no longer extending to rental cars, to “permissive users” — people who use your vehicle irregularly but would be covered in the event of an accident — or other circumstances. It’s important to read the fine print to understand what is and is not covered before purchasing a policy and paying your insurance premiums.
How to buy insurance after a car insurance policy cancellation
Just because one insurance company didn’t want you as a customer doesn't mean they all won't.
Comparing auto insurance quotes from as many companies as possible will help you find the best car insurance rate after your policy cancellation. The Zebra makes it easy to compare rates from popular auto insurance companies — standard and non-standard alike — in search of a great auto policy.
Compare quotes from more than 100 companies.
How to cancel car insurance
The process of canceling your current policy is fairly straightforward. While some of the more technologically-inclined insurance carriers out there may allow you to cancel your car insurance online, oftentimes a simple phone call is most efficient. If you’re unsure of how to cancel your coverage, the steps below outline the cancellation process for most companies.
Your insurance agent can go over any specific requirements for canceling your policy, including any fees or refunds. It's likely that you will need to provide your policy number and other relevant information at this time. Most companies will offer a prorated refund on premiums already paid. Other companies may charge a cancellation fee.
If your current insurer requires a written cancellation notice, your policy may not be canceled until they have received it. It's important to return any cancellation forms promptly to speed the process along.
This is the confirmation from your insurance company that your policy has been canceled. Make note of the effective date of your cancellation to ensure that you do not go without coverage, i.e., an insurance lapse.
Those who have set up autopay through their banking institution should make sure to cancel all future payments.
If you are financing your vehicle, it’s a good idea to let your bank or lienholder know you’ve switched insurance companies, as some will require you to carry certain types of physical damage coverage.
Unless you are completely giving up driving, it’s important not to have gaps in your insurance coverage. This can lead to increases in your auto insurance rates, not to mention that being an uninsured driver puts you at risk of being personally liable for any damage you cause in an accident. If you plan on driving again in the near future, consider purchasing a non-owners policy from your new insurer that can keep you from paying a higher rate on future policies.
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About The Zebra
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- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
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