How to Get Car Insurance After a Policy Cancellation

Don't go too long without a car insurance policy — it could hurt you in the future.

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What happens if my car insurance is canceled?

If you’re considered a high-risk insurance client, most companies will insure you and your vehicle — but it will cost you. 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 you can take in search of an affordable new policy.

 

Canceled car insurance — table of contents:

  1. Is it legal for an insurance company to cancel a policy?
  2. Common reasons for car insurance cancelation
  3. What to do after your auto insurance is canceled
  4. How to get insurance after a canceled policy
  5. How to cancel car insurance

 


 

Car insurance cancellation laws: is it legal for an insurance company to drop your coverage?

Although auto insurance is required in nearly every state, an insurance company has the legal right to cancel a policy if you violate the terms and conditions stated in the original contract.

If you break your 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 your policy immediately. After this point, the burden of finding a new car insurance policy falls on you.

 


 

Why do car insurance companies cancel policies?

An insurance company may drop a client if they violate the stated terms and conditions of the policy.

Here are some common circumstances in which auto insurance policy could be canceled:

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, you fail to turn in documentation of previous insurance history because you don’t have any insurance history, you could face denial of coverage. Many companies, such as Farmers, require customers to carry six months of continuous coverage to be eligible for a policy.

 


 

What to do after your auto insurance is canceled

You have a few options after your coverage is revoked. First, ensure you have a clear answer as to why your policy was dropped. This way, if it is something small such as missing a payment or failing to turn in a document, you can make amends and 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 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 car insurance quotes side-by-side!

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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. 

  1. Call your insurance company or agent: 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. 
  2. Sign/send any required documentation: 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. 
  3. Get notice of cancellation: 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.
  4. Cancel automatic payments: Those who have set up autopay through their banking institution should make sure to cancel all future payments. 
  5. Contact your bank/lender: 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.
  6. Have a new insurance policy in place: 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. 

 


Recent Questions:

How to Get Car Insurance After a Policy Cancellation

Car insurance rate went up after leaving the country

One of the big rating factors companies look at is whether or not you are currently insured and have been for the past six months. When you canceled your policy to go out of the country, this caused a lapse in coverage.

Finding car insurance with a long violation and ticket history

Even with a bad driving record, there are still plenty of options out there for cheap rates and excellent coverage with your car insurance. In fact, you can find most of them with us, at The Zebra.

My home insurance company won't give us a refund

I would ask to speak to a supervisor. If you have a policy that is effective March 22nd, your previous insurance company should allow you to cancel the policy to that day and the remaining premium should be refunded to you.

How do I recover my refund if I canceled a policy the day after the renewal?

Most states have a law about recovering unearned premium from insurance providers. Meaning that if you cancel your policy after you've paid your premium, especially at a renewal, you should be able to collect a refund for any days you've paid for after the policy is canceled.

Ava Lynch LinkedIn

Based in Austin, TX, Ava has been in the insurance industry as a licensed agent for 4-plus years. Ava is currently one of The Zebra’s resident property insurance experts and has been featured in publications such as US News Report, GasBuddy, and Yahoo! Finance.