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Having your car insurance canceled is not only stressful but also puts you at risk. Driving without insurance could mean losing your license, having your car repossessed, or facing legal liability for an accident. If your car insurance is canceled, take action right away by contacting your insurer to find out why, see if they will reinstate your policy, and look for new insurance if necessary.
Here are the steps to take if your insurance is canceled and the reasons it may have been canceled in the first place.
Typically, insurance companies may cancel your auto insurance if:
Different states may have different laws restricting when insurance companies can cancel your car insurance.
Before it cancels your policy, your insurance company must notify you in writing and tell you the date your coverage will officially be canceled. Once you receive this notice, here’s what to do.
If your car insurance was canceled because you didn’t pay your premiums, you may be able to reinstate it. Many insurance companies offer a grace period after you’ve failed to make a payment. During the grace period, your car insurance can be reinstated once you pay the missed premiums and any fines, interest, or fees.
Whether reinstatement is possible depends on the terms of your policy and state laws, so check with your insurance company for details.
Reinstating your policy during the grace period prevents you from having a gap in coverage. Being without auto insurance (known as having a lapse in coverage) can mean higher car insurance premiums in the future. A lapse in coverage could even make it difficult to get car insurance at all.
If getting your car insurance reinstated isn’t an option, you’ll need to look for new insurance. Do this right away, before your policy’s official cancellation date. Even though your current insurer canceled your policy, you may be able to find car insurance from another company that has different standards for issuing coverage.
Get quotes from several insurance companies, making sure to compare the same type and amount of coverage. If you’re still having trouble finding a policy, look for an insurance company that sells “non-standard” car insurance for high-risk drivers. You may be considered high-risk if you have a record of unsafe driving, such as DUIs/DWIs or lots of accidents. Your state’s department of insurance or an independent insurance agent should be able to refer you to companies that sell non-standard car insurance.
When you can’t find car insurance elsewhere, you can turn to your state’s assigned-risk pool as a last resort. States create assigned-risk pools to ensure that even risky drivers have the minimum insurance the state requires to legally drive. Insurance companies agree to provide car insurance to drivers in the assigned-risk pool regardless of how risky they are.
Expect to pay much more for assigned-risk pool insurance than you would for standard car insurance. Contact your state insurance department to find out more about the assigned-risk pool.
Driving without car insurance is a bad idea for the following reasons:
Finding insurance after your auto policy has been canceled can be expensive, but there are things you can do to lower the cost of car insurance.
Having your car insurance canceled can be upsetting, but there’s no need to panic. Depending on the reason your insurance was canceled, reinstating your policy with your current insurance provider could be fairly simple.
If your insurance company won’t reinstate your policy, there are other ways to get coverage. Using an auto insurance comparison tool is a convenient way to explore your options. You can get quotes from multiple insurance providers all in one place, so it’s easier to find the coverage you need for peace of mind.
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