Will My Auto Insurance be Canceled After an Accident?
here ‘s what you should know about the remainder between the two and how to avoid being dropped .
How does a car insurance company cancel a policy?
When an indemnity company cancels a policy, your indemnity is terminated and you are no long covered by the party. According to the Insurance Information Institute, insurers ca n’t cancel policies that are older than 60 days — but there are exceptions. Insurers can drop you if you do n’t pay the premium, you ‘ve misrepresented yourself on the application, or your driver ‘s license has been suspended or revoked .
How does a car insurance company send a nonrenewal?
A nonrenewal, on the other hand, occurs when an policy company decides to end your coverage when the policy expires. The company normally has to give you a 10- to 30-day notice and explain the argue. They ca n’t base the decision on your sex, subspecies, senesce, marital condition, profession or forcible obstruction. But they can choose not to renew the policy for about any other reason — particularly if they feel you ‘re a bad policyholder.
Experts say your insurance carrier credibly wo n’t cancel your policy after an accident. But the caller will probably charge a higher agio when it ‘s time to renew or merely choose not to renew your policy .
These two possibilities are more probable if you ‘ve :
- Filed multiple claims in a relatively short amount of time.
- Been involved in multiple accidents for which you were at fault within a three-year span.
- Committed a serious moving violation, such as reckless driving.
Can my car insurer legally cancel or choose to not renew my policy?
indemnity companies must follow state laws and underwriting guidelines before canceling a policy or choosing not to renew one, says Benjamin Blackmon, a early personal lines insurance company .
“ In some states, like Tennessee, you can cancel for any valid cover argue not specifically excluded, ” he says. “ consequently, an insurance company would be able to cancel you for a one at-fault accident. In other states, like North Carolina, this would not be the case. alternatively, the insurance company may be able to remove forcible price indemnity — such as collision coverage — and leave merely liability coverage on the fomite. ”
Most standard insurers wo n’t cancel coverage after equitable one accident, he adds, unless there are other mitigating circumstances .
And if you ‘re involved in an accident but you ‘re not at demerit, your policy company normally wo n’t cancel your policy, says Christopher Paradiso, owner of Paradiso Financial and Insurance Services in Stafford Springs, Connecticut. “ It may only affect your indemnity if the party that hits you does n’t have indemnity and you need to put in a title using your own collision coverage. ”
so long as the accident occurs before the actual cancellation or nonrenewal date your insurance company indicates, your insurance company is obligated to cover the claim based on the limits stipulated in your policy. Nevertheless, other incidents could lead to claim denials .
How to avoid a policy cancellation or nonrenewal
here are some tips to lower your risk of being canceled or nonrenewed :
- Think carefully before filing a claim. If the accident results in only minor damage that costs less than your deductible amount
- Be a safe driver. “By ensuring that you’re not distracted, you will be more aware of your surroundings and less likely to be involved in an accident,” says Paradiso.
- Pay your premiums on time. Set an automatic reminder if you need to.
- Be honest with your insurer. That goes when you’re applying for a policy, amending your coverage or filing an accident report or a claim
If your policy is canceled or nonrenewed, you can try shopping about for an low-cost policy with early carriers .
“ There are options out there in every state, ” says Bob Passmore, assistant frailty president of the united states of personal lines for the Property Casualty Insurers Association of America. “ Including companies that specialize in offering policies to bad drivers and which will, consequently, charge higher premiums than convention. ”
The one thing you do n’t want to do is drive without proper policy. Every state except New Hampshire and Virginia requires drivers to have liability insurance coverage, with penalties imposed on drivers who do n’t .
Category : car insurance questions