Will My Auto Insurance be Canceled After an Accident?
Car insurance companies almost never cancel a policy after a single accident.
But if you've made several car insurance claims recently, especially liability claims where you were at fault, it's possible that your company will raise your rates or drop you at the end of your policy term. You might also lose your insurance if you lose your driving privileges, like if you crash your car and get a DUI.
When does a car insurance company cancel a policy after a crash?
It's very unlikely that your car insurance policy would be canceled as a direct result of a crash. Your policy can only be canceled mid-term in specific, legally mandated circumstances. But you could have your policy canceled if the crash leads to a DUI conviction or you lose your driving privileges for another reason.
When can an insurer cancel an insurance policy?
- DUI conviction
- Loss of driving privileges
- Failure to pay insurance premium
- Within 60 days of policy start (no reason needed)
Every state has its own circumstances under which insurers may cancel a policy.
If your insurance company cancels your policy, it will notify you by mail and give you some time — usually 30 days — before your policy ends.
What to do if your car insurance is canceled
If your car insurance policy has been canceled, you should do two things: Start looking for a replacement policy, and contact your current company to see if you can have your policy reinstated.
The odds that you'll be able to reinstate your policy depend on the reason you were dropped. For example, if you're just behind on your bill, you may be able to resolve the issue by paying the amount you owe.
But if you were convicted of driving under the influence or another serious driving offense, it's less likely you will be able to get your coverage back. In that case, you may need to look for nonstandard insurance from a company that specializes in high-risk drivers.
It's essential to make sure you have a new insurance policy in place before your old policy ends. Having a car insurance lapse will increase your rates by at least 8%, and the longer you go without coverage, the bigger the increase will be.
When can a car insurance policy be nonrenewed after a crash?
When a car insurance company decides to end your policy when it expires, it's called a nonrenewal. The company usually has to give you a 10-to-30-day notice and explain the reason.
Your car insurance company has the option to nonrenew your policy at the end of your term.
A car insurance company isn't obligated to renew your policy at the end of your term. If your insurer has decided not to renew your policy after a crash, it's likely because it feels you're a higher-risk driver. People who have made multiple claims or been at fault in crashes are more likely to make claims in the future.
Several key things will likely result in your policy being nonrenewed.
- You've been involved in multiple accidents for which you were at fault within a three-year span.
- You've filed multiple claims in a relatively short amount of time — especially liability claims.
- You've committed a serious infraction, such as reckless driving.
Every insurance company evaluates risk differently, but insurers usually weigh some claim types more heavily than others. For example, your insurer will take a liability claim more seriously than a comprehensive claim you weren't responsible for.
What to do when your insurance policy is nonrenewed
If your car insurance policy is nonrenewed, the most important thing to do is to begin searching for a new insurance company right away. It's essential to find a new policy in order to avoid a car insurance lapse. Collect plenty of quotes to find the cheapest option for you — it's even possible your new company will be cheaper than your old one.
If you were happy with your insurance company before your policy was nonrenewed, you can always reach out to get more information and ask the insurer to reconsider. However, there's no guarantee that you'll be able to resolve the issue.
How to avoid a policy cancellation or nonrenewal
While careful drivers aren't likely to have their coverage dropped, there are some things you can do to help prevent this from happening to you.
- Think carefully before filing a claim. Car insurers don't like when you file too many claims, so avoiding filing a claim when you can afford the bill yourself will reduce the chance of cancellation.
- Be a safe driver. The best way to keep your rates down is to avoid accidents, DUIs or other violations behind the wheel altogether.
- Pay your bill on time. Set an automatic reminder if necessary.
- Be honest with your insurer. When you're applying for a policy, amending your coverage or filing an accident report or a claim, make sure you're being truthful.
If your policy is canceled or nonrenewed, you can try shopping around for an affordable policy with other carriers.
The one thing you don't want to do is drive without proper insurance. Every state except New Hampshire requires drivers to have liability insurance coverage, with penalties imposed on drivers who don't.