If your insurance company cancels your insurance policy, it usually stays on file for about five years. During that time, you may be considered a high-risk customer and may pay more for premiums. Learn about the long-term effects of canceling a policy and how to avoid an interruption in your insurance. When your car insurance policy is canceled, it generally stays on your insurance record for about five years, but it can last longer.
This could result in you having to take out high-risk car insurance, which includes higher-than-average premiums. Still, comparing lots of quotes is the best way to make sure you find the best and cheapest auto insurance premium available. Auto insurance companies can cancel or “cancel” your coverage, although you will usually be notified well in advance to get a new policy. Auto insurers that offer grace periods for late payments can give you anywhere from one to 30 days to bring your account up to date.
If your car insurance company decides not to renew your policy on its expiration date, it's not as serious as the cancellation. Canceling car insurance is generally considered more serious than not renewing your policy, as it can affect your insurance history. However, sometimes, even after you've purchased a policy, your car insurance policy may be canceled or not renewed. Since filing claims can be a factor in your policy being canceled or not renewed, it's a good idea to avoid filing a car insurance claim if you can afford repairs out of pocket.
Unfortunately, if your car insurance company cancels your coverage, obtaining another policy could be difficult and expensive, depending on the reason for the cancellation. Some auto insurance companies offer to reinstate car insurance if your car insurance was canceled due to non-payment. In any case, you need to get a new policy quickly, since almost every state requires that you have car insurance to drive legally. All insurance products are governed by the terms of the applicable insurance policy, and all related decisions (such as coverage approval, premiums, fees and charges) and policy obligations are the sole responsibility of the insurance insurer.
First, you can call your insurance company to discuss whether your insurer might be willing to keep your policy. Your car insurance company will likely send you a letter explaining why your coverage was canceled. Other insurance companies may consider the reasons that often lead to cancellation, such as license suspension, to be evidence of high-risk behavior, which generally leads to increased car insurance costs. If your car insurance policy was canceled and not renewed, you can expect to see higher rates when you search for quotes.