Car insurance cancellations can happen for many reasons, including multiple accidents, too many claims, loss of driving privileges, or insurance fraud. Non-renewal of your car insurance policy is another option, usually due to high-risk behavior.
If your insurance policy is canceled, getting new coverage can be challenging, and you’ll often pay higher premiums. However, options are available to get insurance coverage and stay legal on the road.
Why Can Your Car Insurance Company Drop You?
Car insurance companies can drop you if your risk profile changes significantly, making it more expensive to insure. But they don’t cancel insurance policies arbitrarily; practicing safe driving and making on-time payments reduces the chances of cancellation.
An insurance company can end coverage in two ways: non-renewal and cancellation. Non-renewal means the company allows the current policy term to expire but doesn’t offer a new one.
Policy cancellation can happen before the policy term ends. Cancellation usually requires written notice within the timeframe state laws require.
Common reasons for policy cancellation are listed below.
- High-risk driving – Multiple at-fault accidents, reckless driving, excessive moving violations, or a DUI conviction can make you too expensive to insure.
- Non-payment of premiums – While most insurance companies give you a grace period, continuing late or a missed payment of premiums can lead to cancellation.
- Suspended or revoked driver’s license – Losing driving privileges due to DUIs, repeated violations, or other legal infractions can terminate coverage.
- Insurance fraud – Providing false information on your insurance application or making fraudulent claims can result in immediate cancellation.
- Failed vehicle inspection – In some cases, a car that doesn’t meet safety or emissions standards can result in dropped coverage.
- Unauthorized commercial use – Using a personal vehicle for ride-hailing or other commercial purposes without proper coverage may violate auto policy terms.
In some cases, cancellation is out of your control. This can happen if the insurance company discontinues coverage in your state or reduces coverage in your area.
Insurance companies may not continue coverage for policies that are not renewed due to frequent claims, an increased risk profile, or consistent late premium payments. State laws require insurance providers to give you advance notice of cancellation, usually 10 to 75 days. But some states have special rules that can put drivers at risk of surprise cancellations.
For example, in California, if you don’t disclose all household members who drive your vehicle on your insurance application, the insurance company can cancel your policy when they find out.
Knowing why your policy is being canceled or non-renewed allows you to take action. Practice safe driving, make on-time payments, and comply with state laws to keep coverage.
Cancellation vs. Non-Renewal
Insurance companies can cancel a policy at any time or not renew it at the end of a term. No specific number of claims guarantee cancellation or non-renewal; they assess risk on a case-by-case basis.
Cancellation Notice Requirements & State Regulations
In most states, insurance companies must give you advance notice before canceling a policy. For example, Florida requires 45 days' notice in writing before cancellation. Some states, like New York, require insurers to give proper notice of canceling within the first 60 days of coverage. But in most states, they can drop a policy within this initial period without explanation.
Reasons for Non-Renewal
Insurance companies may send you a non-renewal notice for your auto insurance policy if they discontinue coverage in your area, face financial difficulties from natural disasters, or deem you too high-risk to insure.
The Variety of reasons for Non-Renewal are listed below.
- Multiple traffic violations or at-fault accidents
- DUI, DWI, OUI convictions leading to license suspension or revocation
- Committing insurance fraud can also result in legal penalties
If your policy is canceled during your current policy period, they will refund the unused portion of your premium.
How Many Accidents Can You Have Before Car Insurance Drops You?
The number of accidents you can have before your insurance company drops you varies by company, as each company has its own rules of thumb for risk assessment. There is no magic number, but filing multiple claims, specifically more than one in 3 years, can increase the chances of being non-renewed even if not all accidents were your fault.
Each claim gets you closer to being labeled a high-risk driver, which may cause your company to re-evaluate your policy. In some cases, one accident can cancel you, especially if it was at fault, resulting in a suspension or revoked license or showing reckless behavior.
Ultimately, companies evaluate risk on a case-by-case basis, considering the severity of the accident, frequency of claims, and overall driving history when deciding to renew.
How Long Does an Accident Affect Your Insurance?
Accident-related rate increases are not permanent. While each insurance company varies, at-fault accidents will stay on your insurance record for a three-year period, if they are not serious violations (e.g., DUI). If you don’t get into another accident during that time, your rates may drop at renewal.
Can My Insurance Policy Be Canceled After a Claim?
Yes, an insurance company can cancel your policy after a claim, usually due to too many claims, high risk, insurance fraud, or poor payment history.
- Multiple Claims – Filing numerous claims quickly puts you at a higher risk. If you have outstanding claims or numerous accidents, your insurer may cancel or not renew your policy.
- Non-payment – A history of failing to pay your premiums on time can lead to cancellation, especially after a claim.
If your policy is canceled, get new coverage ASAP to avoid gaps that could result in higher premiums or legal troubles. You can also appeal an unjust cancellation, so keep records of all insurer communication and claim details.
Can Insurance Companies Drop You Without Notice?
Auto insurance companies can terminate your coverage at any time, but they usually have to give you advance notice. The notice period varies by state, but it usually lasts 20 days to 30 days or more.
If your policy is dropped, you will get a cancellation letter or non-renewal notice from your insurer. Suppose you think your policy was dropped without notice or want to dispute the decision. In that case, you can file a complaint or appeal to your state insurance department.
Can You Appeal a Car Insurance Cancellation?
Yes, you can appeal by contacting your state department of insurance. Filing a complaint with your state’s insurance regulator might take some time. To avoid a coverage gap, start shopping for a new policy while your appeal is being reviewed.
Getting Car Insurance After Cancellation or Non-Renewal
Getting new coverage should be easy if your auto insurance policy was canceled due to no fault. But don’t allow a lapse in coverage, as driving without insurance is illegal in most states and can lead to penalties or difficulty getting future coverage.
Getting new coverage may be more challenging if your policy was canceled due to high-risk behavior, non-payment, or a suspended license. You may face higher premiums, higher deductibles, or limited provider options. Non-renewals are generally easier to recover from, as many insurers will still consider offering coverage but at higher rates.
Steps to Get a New Policy After Cancellation:
- Start shopping now. The sooner you start looking, the better. Contact local insurance agents at Insurance Navy for help finding the best insurance rates.
- Expect higher premiums – Many insurers charge higher insurance rates after cancellations, especially for infractions like DUI.
- Consider high-risk options. If you can’t find standard insurance, specialized high-risk insurance providers or state-assigned risk pools may be necessary.
- Show good behavior—Maintain a clean driving record, take a defensive driving course, or prove financial responsibility (if required) to eventually qualify for better rates.
While higher premiums may be necessary at first, showing good driving habits over time can help you qualify for standard coverage and get back access to better auto insurance coverage options.
Have you been denied or dropped by your current insurer? We can insure all cars and drivers regardless of risk level or credit score. Call us at 888-949-6289 or get a free quote online today!
