What do I do if my car insurance is canceled?

If your car insurance is canceled for speeding, your future rates could increase by $45.46/mo. More serious offenses may require a period of SR-22 coverage.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: Jun 2, 2022

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Here's what you need to know...

  • In most scenarios, your car insurance company cannot and will not cancel your insurance coverage
  • The company does have the option not to renew your auto insurance policy
  • If you have been charged with DUI or have been in multiple accidents, it’s not a bad idea to search for new auto insurance coverage to make sure you get the lowest rates
  • Once you are considered high-risk, your rates for auto insurance costs increase dramatically

The specifics that dictate a car insurance company’s ability to cancel your policy vary from state to state but, you should know that your car insurance can drop you.

There are some general truths about non-voluntary car insurance cancellation that can help you determine if you will soon find yourself shopping for new coverage.

You will need to have insurance but also carry proof of insurance showing you have at least the minimum required coverage. It’s usually a good idea to also comprehensive coverage, collision coverage, uninsured motorists coverage, and even more. In fact, sometimes you must have full coverage.

Read on to learn when a car insurance company can cancel your auto insurance policy against your will, and then enter your ZIP code to receive quotes from multiple car insurance companies!

What is non-voluntary car insurance cancellation?

The primary reasons an insurer might cancel your policy revolve around fraud, failure to pay your premium, or being in possession of a suspended or revoked license.

The latter category could include tickets for driving over the speed limit, accidents, or one or more arrests for Driving Under the Influence (DUI).

If you have speeding tickets, accidents, or a DUI on your record, but your license has not been suspended or revoked, it is unlikely that your insurance company will cancel your coverage.

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What is the difference between non-renewal versus cancellation?

Just because an insurer does not cancel your policy because of speeding tickets, accidents or DUI doesn’t mean your coverage is not in danger. Some types of traffic violations aren’t even factored in, but major violations will be. Though a minor violation like parking tickets and other non-moving violations won’t matter so much to your insurer.

There is yet another way that a car insurance provider can drop your coverage, and the opportunity rolls around with each renewal period.

A company can choose not to renew your policy30 day notice if, for instance, your clean driving record has been tarnished.

An excessive number of speeding tickets, accidents, or a DUI arrest are some of the factors that can lead to non-renewal.

State law in Florida, as an example, stipulates that car insurance companies are within their rights not to renew policies on drivers who have at least two at-fault accidents.

Being in three accidents, whether you are determined to be at fault or not, will likely be met with non-renewal once your current policy expires.

A significant difference between non-renewal and cancellation is that non-renewal does not necessarily put you into a pool of high-risk drivers.

Because circumstances surrounding non-renewal often have nothing to do with the driver (for example, it may result when a company stops offering insurance where you live), it does not automatically have the negative effect that cancellation does.

What can you do if your car insurance is canceled or not renewed?

If your policy is canceled, you will most likely be relegated to a group of people known as “high-risk” drivers. These drivers are denied the standard car insurance rates; instead, they must choose from “non-standard” options.

Non-standard car insurance is more expensive, justifying the high-risk level insurers are taking on by covering drivers with a proven record of accidents, traffic violations, excessive claims, and other similar factors that affect car insurance rates.

You should consider this option only after exhausting all avenues available to save your existing policy.

In addition to canceling your policy, there are several things you can do to protect yourself:

If possible, find out why your policy was canceled. This information will help you understand what steps need to be taken to avoid future cancellations.

Make sure you keep up with payments on time.

While the non-standard car insurance market is smaller and more expensive, you can utilize the same online quote comparison tool that applies to standard car insurance when shopping for the best non-standard policy for your situation.

By typing in your personal information one time, you will have multiple car insurance quotes at your fingertips.

How are car insurance rates affected?

It is not just speeding tickets, accidents, or a DUI that will affect your status as a high-risk driver, not to mention the fact that the type of violation changes how much your annual premiums can raise.

Age can also have an effect, with drivers younger than 25 or older than 70 paying higher rates than those in between.

Men usually pay more than women. There are health conditions impacting driving ability that can lead to higher premiums as well. More expensive cars cost more to insure.

If you know all the factors that go into your higher rates, you will be better able to decide if making changes to your driving lifestyle will lead to savings on insurance premiums.

If your driving record is so bad that you cannot find coverage through private means, you are eligible for state-sponsored “assigned risk” coverage.

Each state that requires car insurance must make sure that there are options available for all drivers — even those that present the highest risk.

To that end, each car insurance provider in that state must be represented in the assigned risk pool relative to its size.

Larger companies are required to insure more assigned risk drivers than smaller companies.

High-risk drivers are randomly assigned their car insurance provider through this program.

Since assigned risk coverage is guaranteed to be one of the most expensive options out there, it is wise to exhaust all other options through the online quote comparison tool before resorting to this form of insurance.

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How can you save on your car insurance after your policy is canceled?

While you can be sure that your insurance rates will be considerably higher when you join the ranks of high-risk drivers, there are ways to minimize the damage by using the online quote comparison tool.

This useful technology allows you to do a thorough job of researching car insurance options before committing to the best policy for you.

You may want to consider switching from collision-only policies to comprehensive coverages. Comprehensive covers everything except fire and theft. It is important to note that these types of policies require larger deductibles which mean lower monthly rates for drivers but greater potential losses.

Another option would be to switch carriers. You might get a cheaper rate because they offer different products. For example, some insurers specialize in low-cost auto insurance while others focus on providing good customer service.

Driving without insurance is not an option — so don’t waste any time finding the car insurance policy that will get you back on the road legally and safely.

Enter your ZIP code to compare rates from multiple car insurance companies for FREE!

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