What Happens If Car Insurance Is Cancelled?

Updated October, 2020
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If your car insurance is cancelled, that means the insurance contract is no longer valid. Often, insurance carriers will reinstate a policy is the lapse in coverage has been less than 30 days, and there have been no accidents in that time.


How Do I Keep My Policy From Being Cancelled?

If you've missed payments, and you are nervous about having your policy cancelled get in touch with your insurance representative. Attempt to negotiate reinstatement terms, so that your policy does not lapse.

If you have a very specific reason for missing car insurance payments such as unexpected life events like hospitalization, family emergencies, or financial struggles that make it difficult to manage debt, you can discuss your situation with your representative. Circumstances that are out of your control may give your insurance provider cause to reconsider cancellation.

If you have held a policy for a long time, you have a greater chance of having your insurance representative work with you on a solution.You may be able to negotiate new payment terms, but be prepared to be asked to pay the full amount owed before they reinstate your policy. Insurance agencies are usually willing to work with you, especially if you've been with them for an extended period of time.

While notices regarding payment may be overwhelming and stressful, it is best that you keep up with the status of your account to avoid cancellation. Always reach out to your representative when you're falling behind. They are there to help!


When Would My Coverage Be Cancelled For Non-Payment?

Your insurance contract will include detailed guidelines regarding financing your policy.  Here, payment schedule and terms will be identified.  

Every time you violate the payment terms of your policy, whether that be missing payments or submitting them late, you compromise the status of your policy.

A bounced payment is hugely detrimental as it not only will result in hefty bank fees, but could also result in expensive penalties from your insurance provider.  Having a payment bounce or missing a payment won't cause your policy to be canceled immediately, but it does put your account in jeopardy because they will document the occurrence.  Multiple infractions will eventually lead to cancellation. 


How To Avoid Having Your Car Insurance Canceled Due To Non-Payment

Car insurance companies are willing to work with you on payment issues.  Many companies have a wide array of payment options that span from online payments to credit card payments to mobile app payments.  When choosing an insurance provider, consider which one offers the amount of flexibility you need.  The number one way to avoid having your policy canceled due to non-payment is to maintain communication with your representative and be proactive about making payments.

Before choosing your insurance provider, make sure the suggested payment plan and frequency work for you.  If you already have an insurance provider, but your financial situation has changed, you can try to work with your representative to amend your plan or consider switching to a provider that is a better fit.


Purchase A New Policy Before Cancellation Of Your Current Policy

Being uninsured for even a day can have expensive consequences.  If you plan to own a car after you cancel your policy, you will need to have purchased a new policy prior to your cancellation date.

Be proactive about lining up your cancellation date with the date your new policy comes into effect.  Letting your coverage lapse could result in liability for damages caused by an at-fault accident, as well as high premiums later on.  A lapse in coverage on your record will earn you a label of "high-risk driver."


3 Points To Consider When Comparing New Policies

If you've made the decision to leave your current policy, it is time to start shopping for a new policy.  You'll want to start immediately to give yourself the time you need to consider your options.  

               

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Call an insurance expert
Our team will help you find the lowest insurance prices.
866-996-3156