Can your auto insurance company drop you after a claim?
Drivers may choose to cancel their auto insurance after an accident but must be careful to avoid a lapse in coverage by having a new policy start before cancellation.
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Michael Leotta
Insurance Operations Specialist
Michael earned a degree in Business Management degree with an insurance focus, which led to a successful 25-year career in insurance claims operations and support. He possesses a high-level of business acumen across multiple areas of the insurance industry. Over the course of his career, he served in multiple roles supporting claims operations including: Claims Specialist, Claims Trainer, Claim Au...
Insurance Operations Specialist
UPDATED: Sep 3, 2024
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 3, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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Whether you are wondering if you can cancel car insurance or if an insurance company can drop you after an accident, the answer is yes to both. You can cancel car insurance whenever you want, even after an accident. You may have to pay a cancellation fee if you cancel before the end of your policy term, however, and you should read up on how to cancel your car insurance to make sure you do it correctly. Your insurance company may also choose to drop you if you cause an accident.
Keep reading to learn if you can cancel your insurance after an accident. We will cover everything from common reasons for canceling to when insurance companies may drop you as a customer.
- You can cancel your auto insurance after an accident, but your company will still handle your accident claim even after the cancellation
- If you are switching insurance companies, make sure to have a new insurance policy start before you cancel to avoid a lapse in coverage
- Insurance companies might choose to drop you after an accident if it was your fault
Can I cancel my car insurance after an accident?
Yes, you can cancel your car insurance after a car accident. However, your company will still handle your claim even if you cancel your car insurance after an accident. Your insurance company won’t deny your claim just because you canceled your car insurance after an accident claim.
Basically, as long as you had active car insurance coverage on the day of the accident, your claim won’t be denied just because you chose to cancel shortly after. So if you want to switch your auto insurance company after an accident, you won’t need to worry that cancellation will affect your current accident claim.
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Reasons for Canceling Auto Insurance After an Accident
There are numerous reasons why drivers might choose to cancel their car insurance after an accident. They might be unhappy with the claims process, dissatisfied with customer service, or seeking lower rates elsewhere. Additionally, if their vehicle is totaled in the accident, they may not need insurance until they purchase a new car. My car was totaled; should I cancel my insurance? In some cases, my insurance company dropped me due to these circumstances. With the recent Nationwide Insurance closure, these issues have become even more pertinent.
Canceling Auto Insurance for Poor Customer Service
One reason drivers may cancel after an accident is because of poor customer service. If they have been unhappy with their insurance company and received poor service during the claim, this will likely cement the decision to leave.
However, all drivers must carry the minimum car insurance required by their state to drive legally. Even a lapse of insurance for a day or two is illegal. So if you choose to switch your auto insurance company to get better customer service or rates, you must have your new policy start before you cancel your old insurance policy.
Otherwise, any lapses in car insurance will raise your auto insurance rates, making it harder to find an affordable car insurance policy. So if you are looking to switch, don’t rush into sending in your cancellation notice until you have a new car insurance policy lined up and ready to go.
Canceling Car Insurance Because Your Vehicle was Totaled
The other reason drivers may cancel their auto insurance policy after an accident is because their car is totaled. Unless they have other vehicles that need to be insured, it makes no sense to keep car insurance until the driver can buy a new car.
Remember, after your car is totaled, you must maintain active insurance coverage until you transfer the title. This prevents a lapse in coverage. Once you’ve transferred ownership, you can then cancel your auto insurance. This is crucial if you’re looking to lower car insurance rates after an accident or if multiple claims have led to your car insurance company dropping you
Canceling Auto Insurance Because of Increased Rates
If you cause an accident, you will see an increase in your auto insurance rates. Finding cheap car insurance after an accident is more difficult. Suppose your auto insurance company raises your rates more than the average rate increases of other companies in your area. In that case, you may want to switch to a different company.
It is a valid reason drivers switch car insurance companies, and we recommend shopping around and getting quotes regularly. Some insurance companies will charge significantly less for drivers with at-fault accidents, making them a better choice after an accident. Look at the table below to see the average rates at different companies for drivers with accidents on their records.
Full Coverage Auto Insurance Monthly Rates for Clean Record vs. One Accident
Insurance Company Clean Record One Accident
Allstate $160 $225
American Family $117 $176
Farmers $139 $198
Geico $80 $132
Liberty Mutual $174 $234
Nationwide $115 $161
Progressive $105 $186
State Farm $86 $102
Travelers $99 $139
U.S Average $119 $173
Some companies that offer cheap auto insurance are Geico auto insurance and State Farm auto insurance. However, bear in mind that while USAA offers great rates, it is only available for military members and veterans, so most drivers won’t qualify to purchase USAA auto insurance.
Can my insurance company cancel my policy?
Can insurance companies drop you? Yes, your car insurance can cancel your auto insurance policy. However, a car insurance company can’t just cancel for no reason, and it can’t just cancel without notice. Therefore, car insurance companies need to give you advance notice so you can find another car insurance company to insure you.
So, when will an insurance company drop you? Insurance companies may drop you for the following reasons:
- Your driver’s license has either been revoked or suspended.
- You have become too high a risk to ensure and need high-risk auto insurance to drive.
- You lied on your insurance application about your address or the number of traffic tickets.
- You have missed payments on your auto insurance policy.
When will car insurance drop you? In some states, car insurance companies can cancel within three months of insuring you for even more minor incidents, such as if you get into a minor fender bender. Your insurance company may also choose not to renew your auto insurance policy.
Insurance companies have the option of non-renewing policies for various reasons, some of which may not be directly related to your actions. For instance, if you’ve recently filed two comprehensive claims due to deer unexpectedly crossing your path, even though these incidents were beyond your control, insurers might perceive you as a higher risk because you often drive in areas prone to wildlife encounters. This situation underscores why insurance companies can decide to drop coverage, including cases where auto insurance is terminated after a claim, or in instances.
How can I avoid being dropped by my insurance company?
While sometimes being dropped by your car insurance company is outside of your control, there are some things you can do to lessen your chances of getting dropped:
- Be honest with your insurance company about your driving record and other information. Insurance companies can drop you for misrepresenting yourself on an application, which is a form of fraud.
- Keep a clean driving record and drive carefully. Driving safely and having a clean driving record will help ensure the insurance company doesn’t drop you.
- Make your auto insurance payments on time or use automatic payments. If you aren’t confident in remembering to pay on time, set up an automatic payment method to eliminate the risk of late payments.
- Only file necessary claims. If the damage is minor and costs slightly more than your deductible, it is not worth filing a claim if you can afford to pay for the repairs out of pocket.
If you miss a payment or can’t afford to pay a payment right away, reach out to your insurance company immediately. There is usually a short grace period after a missed payment before your insurance company cancels your insurance policy. Your company may also be able to set up a temporary payment plan to help you afford your car insurance.
However, suppose you don’t contact your insurance company about making payments. In that case, it can cancel your auto insurance policy, and you will be stranded without insurance until you can find a new insurance company. And since driving without insurance is illegal, you will face higher insurance rates once you sign up with a new company after a lapse.
The Final Word: Can I drop insurance after an accident?
Yes, you can drop insurance after an accident. However, it is important to have a new insurance policy that will start before your cancellation goes into effect, or you risk driving illegally without insurance. Also, remember that insurance companies may choose to drop you as a customer after an accident.
If you’re seeking a new auto insurance provider with more competitive rates following an accident, your best approach is to compare options by requesting quotes. Utilize our complimentary quote comparison tool to explore the best auto insurance rates available from companies in your region, including those unaffected by developments like American Family Insurance closure or changes at American Modern Insurance.
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Frequently Asked Questions
Can I cancel car insurance after a claim?
Yes, you can cancel your car insurance after a claim. Your old car insurance company will still handle your claim, whether you are switching car insurance companies or canceling car insurance altogether.
Should I cancel my car insurance if my car is a total loss?
You must wait until you sign over the title before canceling your auto insurance. Additionally, if you have other cars on your insurance policy, you cannot cancel the entire policy if one car is totaled. Instead, you should remove the totaled car from your policy. For further assistance, consider contacting auto insurance agents near you, especially if your auto insurance dropped you after a claim. Whether you’re looking for the best insurance for multiple cars or ASI homeowners insurance, local agents can provide valuable guidance.
Can your insurance company drop you?
Yes, car insurance companies can drop you or choose not to renew your policy.
Is it hard to find auto insurance if your insurance company cancels your policy?
Yes, it can be harder to find an auto insurance company willing to insure you if your last auto insurance company canceled your policy. As a result, you may have to shop around at a few different auto insurance companies to find coverage. If you can’t find anyone willing to insure you, you may have to apply for insurance through your state’s guaranteed auto insurance program.
Will USAA drop me for too many claims?
If you’re curious about the number of accidents that might lead to your insurance being canceled, the answer varies. However, if you have several at-fault claims, USAA may consider you a high-risk driver and could either drop your coverage or choose not to renew your policy. Even if USAA doesn’t drop you, your auto insurance rates will likely increase for at-fault accidents, though they do offer accident forgiveness with USAA. Additionally, be aware that USAA has a car insurance grace period to help manage coverage lapses. If USAA dropped your auto insurance, exploring options like an USAA insurance policy for your Hyundai could be beneficial.
Can State Farm cancel my insurance?
Yes, State Farm can cancel your insurance. When does State Farm cancel insurance? In most cases, car insurance companies will drop you as a customer if you misrepresent yourself on the application, your license is suspended or revoked, you miss payments, or you are a high-risk driver. State Farm is required by law to give you notice of cancellation and will give you a set number of days before canceling so you can find a new car insurance company.
How many claims before State Farm drops you?
The exact number of claims that would result in State Farm insurance cancellation is not fixed and depends on the specific details of each claim, the nature of the claims, and the policyholder’s overall risk profile. Typically, having multiple at-fault accidents or numerous claims within a short timeframe can raise the chances of hearing “State Farm dropped me.” However, State Farm accident forgiveness may apply to some not-at-fault insurance claims, which can mitigate the risk of cancellation. For those with multiple vehicles, exploring the best multi-car insurance options might be beneficial to manage overall coverage and costs.
Can an insurance company drop you after one accident?
Yes, an insurance company can drop you after one accident, especially if the accident was your fault and resulted in significant claims. The decision also depends on the company’s policies and your overall risk profile.
Will USAA drop me for accidents?
According to USAA auto insurance reviews, a policyholder may be dropped if deemed high-risk due to multiple at-fault accidents. However, USAA offers accident forgiveness for the first qualifying at-fault accident, which can prevent immediate cancellation. USAA auto loan rates, USAA’s BBB rating, USAA bodily injury coverage, USAA’s cancellation policy regarding auto insurance, finding USAA claim adjusters, USAA claims hours, and USAA claims reviews are all important factors to consider when evaluating their services.
Can an auto insurance company drop you?
Yes, an auto insurance company can drop you, but they must provide advance notice. Reasons can include multiple claims, high-risk driving behavior, failure to pay premiums, or fraud.
Can an insurance company drop you during a claim?
An insurance company cannot drop you during an active claim. They must handle any claims made while your policy was active, even if they decide to cancel your policy later.
Can I cancel car insurance after a claim?
Yes, you can cancel your car insurance after a claim. The insurer is still obligated to process the claim as long as the policy was active when the accident occurred.
Can I cancel my car insurance after an accident?
Yes, you can cancel your car insurance after an accident. However, ensure you have new coverage in place before canceling to avoid a lapse in coverage, which can result in higher premiums and legal issues.
Can I file a claim if my insurance policy is canceled but was active at the time of an accident?
Yes, you can file a claim if your policy was active at the time of the accident. The insurance company is obligated to handle the claim based on the coverage you had at the time of the incident.
Does State Farm drop customers?
Yes, State Farm can drop customers for various reasons, including multiple claims, non-payment of premiums, or high-risk driving behavior. They are required to provide notice before canceling a policy.
Does USAA drop customers?
Yes, USAA can drop customers if they are considered high-risk due to factors such as multiple at-fault accidents, non-payment, or fraudulent behavior. However, USAA also offers accident forgiveness for the first at-fault accident under certain conditions.
How many accidents can you have before your insurance drops you?
The exact number varies by insurer and policyholder circumstances. Generally, multiple at-fault accidents within a short period can lead to cancellation. Insurers assess the risk profile and claims history to make this decision.
How many auto claims before insurance cancels?
There is no set number, as it depends on the insurer’s policies and the nature of the claims. Multiple claims, particularly if they are at-fault accidents or large payouts, can increase the likelihood of cancellation.
If my car is totaled, do I still make insurance payments?
Yes, you must continue making insurance payments until you officially cancel the policy or the insurer confirms the end of the coverage. If you finance your car, the lender may also require proof of continuous coverage until the loan is settled.
What to do if car insurance drops you?
If your car insurance drops you, immediately start looking for new coverage to avoid a lapse. Consider high-risk insurance pools in your state if you’re having trouble finding coverage. Compare quotes and consider working with an insurance broker to find the best option.
When will State Farm drop you?
State Farm may drop you for reasons such as multiple claims, high-risk driving behavior, non-payment of premiums, or fraud. They will provide advance notice before canceling your policy.
Why do insurance companies drop you after a claim?
Insurance companies may drop you after a claim if they determine you to be a high-risk driver, especially after multiple claims. This decision is based on their assessment of your risk profile and the potential cost of future claims.
Why would State Farm drop you?
State Farm might drop you for reasons including multiple claims, high-risk driving behavior, non-payment of premiums, fraud, or misrepresentation on your application. They are required to provide notice before cancellation.
Will Geico drop me after two accidents?
Geico might drop you after two at-fault accidents, depending on the severity and frequency of the incidents. Each case is evaluated individually, but multiple at-fault accidents generally increase the risk of policy cancellation.
Will my insurance drop me after two accidents?
It is possible for your insurance to drop you after two at-fault accidents, as multiple accidents suggest higher risk. The decision varies by insurer and individual circumstances, but insurers are likely to re-evaluate your risk profile and may choose not to renew your policy.
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Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Michael Leotta
Insurance Operations Specialist
Michael earned a degree in Business Management degree with an insurance focus, which led to a successful 25-year career in insurance claims operations and support. He possesses a high-level of business acumen across multiple areas of the insurance industry. Over the course of his career, he served in multiple roles supporting claims operations including: Claims Specialist, Claims Trainer, Claim Au...
Insurance Operations Specialist
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.