What to do if your car insurance is canceled?

Car crashes cost around $242 billion in damages and productivity losses every year, according to the National Highway Traffic Safety Administration.Car insurance is meant to protect you from financial losses resulting from collisions or other damage. You could find yourself in a difficult position if your auto policy is cancelled.

If your car insurance provider cancels your coverage, there may be several options available to you. The Bankrate insurance editorial team has provided the following steps to help you stay safe.

Can car insurance companies drop you?

Car insurance companies may cancel or “drop” your coverage. However, you will usually be given sufficient notice to get a new policy.Most likely, your car insurance company will send you a letter explaining the reason why your coverage was terminated. You can contact your agent to get more information.


  • You didn’t pay your premium.
  • Your driver’s licence was suspended or revoked.
  • You weren’t honest with your application.

There may be other scenarios that could result in your policy being cancelled if it has been in effect for less than 60 days.

What should you do if your auto insurance has been canceled?

You may have received an auto insurance cancellation notice. The first thing you should do is to learn why the policy was cancelled and how long it takes to replace it.In order to give you time to search for a new policy, your insurance company must notify you before any cancellation occurs. Your state’s regulations may determine how much notice you receive.

These steps may help you if your car insurance coverage has been dropped.

  • Check with your provider to see if they are willing to reinstate your coverage.Amy Bach, executive director at United Policyholders in San Francisco, advises that “if you can work it out avec the insurance company to reinstate, that’s usually what most people want to do.”
  • Send a letter to your insurer asking them to return you.The state you live in may be able help. You could, for example, seek out the assistance of the Illinois Department of Insurance. This department holds hearings regarding insurance appeals.
  • Find a new provider of insurance.You may be able to get quotes from multiple carriers to find a new provider if your insurance company decides not to renew your policy. It is crucial to find out when your policy ends so that you can obtain coverage before it expires. A lapse in coverage could be considered ashigh-risk behaviorThis could lead to higher car insurance premiums in the future.

What is the difference between policy cancellation and nonrenewal

Timing is what makes an auto insurance cancellation different from a nonrenewal.

Insurance policies can be considered contracts that last for six months to one year. Your provider will decide whether to offer you a renewal contract at the end of your term. Nonrenewal is when the insurer does not offer additional coverage after the term ends. The provider must usually send you a notice about nonrenewal at least seven days before the expiration of your policy. This gives you ample time to look for new coverage.

There are many reasons that insurers may not renew your coverage. Here are some of the most popular:

  • You were cited because of drunk driving and other serious driving offenses.
  • You have filed too many claims, especially for accidents that you caused.
  • The company has decided not to offer coverage in your area.

An insurance cancellation, on the other hand means that your policy can be canceled at any time after the renewal date. Cancellations are only allowed for specific reasons. The insurance company has usually 60 days from the date you buy a policy to cancel it. An insurance policy cannot be cancelled after that time.

  • You have not yet paid your premiums.
  • You have lied or committed fraud on your insurance application.
  • Your driver’s licence has been suspended.

The Bankrate Insurance editorial team has highlighted the main differences between policy cancellations or nonrenewals in the table below.

Can you fight a car insurance policy cancellation?

After receiving a notice cancelling your policy, you can challenge the car insurance company.To find out if your insurer is willing to keep your policy, you could call your insurance company. You may be able reach an agreement with your carrier depending on the reason you have cancelled.

If you are unable to reach the company, you can contact your state insurance department and file a complaint. You may be eligible for cancellation depending on where you live. To determine if cancellation was justified, the state insurance department may investigate.

Is it more difficult to obtain insurance if you are dropped?

If your auto insurance company decides to drop you from coverage, it could make it difficult or costly to get another policy. It all depends on the reason.Other insurance companies may view the reasons for cancellation (e.g. license suspension) as evidence of high risk behavior. This generally leads toHigher premiums.

Some companies also offer high-risk insurance so if you are unable to replace coverage due to an accident, tickets, or DUI conviction, it does not necessarily mean that your policy will be cancelled. Although your premium may be higher if you have accidents, tickets or a DUI conviction, most providers offer discounts that could save you money.

You may be eligible for coverage through the state’s “assigned risks” program if you are unable or unwilling to purchase a policy with another insurer. This type of insurance is usually available to drivers who are unable to purchase a policy on the private market.

Questions frequently asked

Which insurance policy is best for your car?

Your location, driving record, and personal preferences will all play a role in choosing the best car insurance. You may be able to get quotes from multiple companies to find the best policy for you.

Can I get coverage again if my carrier dropped me?

You will most likely be able find coverage again if you lose your insurance policy. You may not want to conceal the fact that your policy was dropped by your new carrier. Falsely completing an insurance application could result in your policy being cancelled all over again. You may be unable to obtain auto insurance coverage through a private carrier. In this case, it is worth contacting your state’s Department of Insurance for information.

What could cause my provider to cancel my auto insurance policy

An auto policy cannot be cancelled if it is not paid in full, if there has been any insurance fraud or if the license was suspended. Insurance companies have the option to opt for nonrenewal. This means that your policy will be terminated at the end its term. It can be done for many reasons, including risk avoidance or changing insurance offerings.