Every state has different limits on car insurance, but all require drivers to carry a certain amount of car insurance liability in order to legally drive. If you don’t have car insurance, you’re not legally allowed to drive. But what happens if your car insurance is unexpectedly cancelled? You still need to be able to travel, after all, but driving without insurance can lead to expensive fines or even a suspended license.
Reasons Your Car Insurance Policy Might Be Cancelled
It’s important to know that insurance agencies generally must give you a reason for cancellation as well as a warning period before the policy is cancelled. This shoulder be long enough to begin planning to find different coverage.
There are many reasons an insurance company might cancel your policy or drop you as a client. Perhaps the most common reason is unpaid premiums. If a driver does not pay their premiums, insurance agencies will drop that driver. Don’t worry if you’re a few days late paying. At most, some insurance agencies charge a small late fee, but your policy should not be cancelled if you’re only a couple says late on payment.
Insurance agencies may also drop you if you’ve had too many claims. Drivers with too many claims are often known as high-risk drivers, meaning they are more likely to file a claim than others. Some insurance companies don’t insure high-risk drivers, and so will drop clients that become high-risk drivers.
Preventing Cancellation
Depending on the circumstance, you may be able to appeal to your insurance provider to not cancel your policy or drop you as a client. This doesn’t always work, but it’s worth getting in contract with your insurance agent about the issue.
What Happens After Cancellation?
Unfortunately, having your insurance policy cancelled can make it harder to find another policy. First, make sure that you have evidence of the situation. If you’re dropped because of claims, for example, have proof of those incidents to readily present to insurance agencies.
You will likely pay more for insurance after your policy is dropped, as well. Thankfully, there are insurance agencies that specialize in nonstandard and high-risk drivers. Be careful when shopping for a new policy, however. These agencies often inflate prices in order to make up for the risk their clients pos. Compare rates to find the best price for coverage.