My Car Insurance Got Canceled: What Now?

Key Points:

• If your car insurance policy is canceled, you’ll usually get a 10 to 30-day grace period to buy new coverage. 
• Driving without insurance for any length of time can result in having your license and registration suspended, higher insurance rates, and various fees.
• Not paying your premiums or misrepresenting your driving history are two reasons an auto insurer might cancel your policy.

If you received a notice that your car insurance got canceled, don’t worry–it’s not the end of the world. Take a minute to breathe. Create a plan of action and then get a new insurance policy.

Today, we’ll talk about the different types of insurance cancellations and why a company would cancel your policy. Then, we’ll go over what to do if your insurance got canceled and how to find the best insurance company after a cancellation.

Time is of the essence, so you don’t want to waste it getting auto insurance quotes from unreliable companies. Check out our review of the best car insurance companies available today and get started comparing quotes using our tool above.

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What To Do If Your Insurance Gets Canceled

What happens when your insurance gets canceled? You can either fight a cancellation if the company made a mistake, or you can get new car insurance. You’ll usually have a grace period of between 10 and 30 days to get new coverage before your current policy term expires.

If your car insurance has been canceled and you don’t get new insurance, you could have your license and registration suspended for driving without insurance. Depending on the reason for cancellation, you may have to pay more for high-risk coverage for the next few years.

Quick Tips For Dealing With An Insurance Cancellation

Here are the things you should do once your insurance coverage has been canceled: 

• Determine how long you have until coverage runs out.
• See if you can fight the cancellation.
• Get another insurance plan ASAP.
• Avoid a lapse in your insurance coverage–even for a day.
• Be prepared to pay higher auto insurance rates for for high-risk coverage.

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Top Reasons Why Your Auto Insurance Policy May Have Been canceled

There are a few common reasons why your car insurance policy may have been canceled. Sometimes, it’s for reasons outside of your control. But other times, your insurance company can decide to cancel your coverage because of something you have done.

Nonrenewal

If you’ve received a notice of nonrenewal, your auto insurance company has decided not to renew your policy at the end of your term. That might be because the company wants to reduce the number of insured people in your state or it doesn’t offer your particular plan anymore. It could also be because of unrelated things that are happening to the business.

Nonrenewal notices for external reasons usually give you at least 30 days’ notice. However, a company can also issue a nonrenewal for non-payment. In that case, the provider might only be required to give 10 or 20 days’ notice.

A nonrenewal doesn’t carry the same consequences that other types of cancellations do. You should be able to find another standard car insurance plan easily. When your policy is up, it simply doesn’t renew. By that time, you should have started a new policy at another company to maintain continuous auto insurance coverage.

Cancellations

Policy cancellations are a different story. Cancellation can happen at any point during your coverage term, or it could even happen before your coverage starts. Here are a few reasons why auto insurance companies cancel policies:

• You misrepresented yourself or your situation when obtaining car insurance quotes (didn’t disclose driving history, didn’t add drivers in the household, etc.).
• You didn’t pay your bill.
• Your driver’s license was suspended or revoked.
• You have too many recent at-fault accidents or violations.

Usually, something significant has to happen for a car insurance company to cancel your policy. Even so, a cancellation could still come as a surprise, especially in cases of misrepresentation. 

When you fill out an auto insurance quote form, you have to be honest about your driving history, other household members who drive, and your vehicles. Insurance companies have a set underwriting period after you buy the policy to investigate your background and situation. If anything important was left out, the company can cancel your policy.

You’ll notice that nonpayment is on this list too. If the situation is bad enough, the insurance company can just cancel your policy instead of sending a nonrenewal notice. Cancellations usually require 10 to 30 days’ notice for the driver to get new car insurance coverage.

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Option 1: Try To Fight The Cancellation

You should fight the cancellation or nonrenewal if you think the auto insurance company has made a mistake. State laws for insurance cancellations are strict, so if the company did make a mistake, it should take you back as a customer.

When you get a notice of cancellation or nonrenewal, call your insurance agent right away. See what the reason is, and see if there’s anything you need to clarify. If you have outstanding debts for traffic violations, paying those off might reverse the cancellation. Maybe your ticket was sent to the wrong address, so you didn’t even know you owed anything.

If the cause of the car insurance cancellation is a misunderstanding, your insurance agent should be able to reinstate your coverage. If they won’t, but you still feel like they made a mistake, you can reach out to your state’s department of insurance and file a complaint. The National Association of Insurance Commissioners keeps an updated contact list of each state’s insurance department.

Also, if you received a cancellation notice due to nonpayment of premium, some companies will let you pay the rest of your premium within an agreed time frame to reinstate your policy.

Finally, if had a canceled policy for a legitimate reason like a license suspension or a DUI conviction, you won’t be able to fight it.

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Option 2: Get New Insurance (And Fast)

If you’re not able to successfully fight against your policy cancellation, the next thing to do is to get another insurance policy.

In some cases, you can easily find car insurance from another standard provider. This would be the case if your insurance company sent a nonrenewal instead of a cancellation, or if your insurance was canceled because you didn’t disclose another driver in your household when filling out a quote.

However, if you have a DUI or a license suspension in your recent history, you might not find insurance from standard providers. The next option is to check providers that specialize in high-risk auto insurance. These include but are not limited to the following providers:

• Progressive 
• The General Insurance
• Workmen’s Auto Insurance Company
• AssuranceAmerica Auto Insurance
• Preferred Auto Insurance Company
• Access Auto Insurance
• Good2Go Auto Insurance
• Freeway Auto Insurance
• Acceptance Auto Insurance

In rare cases, you could be denied even by these companies. If that’s the case, you can turn to your state’s assigned risk pool, also called the “shared market” or “residual market.” This solution provides insurance for drivers who can’t find car insurance on the regular market.

States require auto insurance companies to cover a portion of the assigned risk pool according to market share. So you might be able to find coverage from a company like Geico through the assigned risk pool.

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What To Do If You Can’t Afford A Car Insurance Payment

If you know you have a payment coming up that you can’t afford, you need to make some arrangements. First, try to see if your car insurance company will push out your payment for one month. Insurance companies let customers do this once in a while.

If that won’t work, you can always change your coverage options. A change in coverage is usually reflected on your next billing cycle. For example, maybe you have a good health insurance plan so you don’t need to have medical payments coverage on your policy. Or, maybe you can lower your liability limits to the state minimum for a few months.

Call your agent and see if you’re paying for other things like roadside assistance or rental coverage that you could go without. But if the bare minimum is still too expensive, do some research and think about switching to a cheaper auto insurance company. You can change companies as often as you want, but don’t ever go without insurance.

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What’s The Danger Of Driving Without Auto Insurance?

The question should really be, “What isn’t dangerous about driving with insurance?” Driving without insurance is a bad idea. Here’s what can happen if you get pulled over by the police while driving without insurance:

• You’ll get a ticket.
• Your license and registration will be suspended.
• You’ll have to turn in your license plates to the Department of Motor Vehicles (DMV).
• You’ll have to pay reinstatement fees to get your license and registration back once you have insurance.
• You’ll have to file an SR-22 form and carry insurance for the next three years.
• Your car insurance rates will be higher for the next three years.

Now, here’s what can happen if you cause an accident without having insurance:

• You’ll be subject to all of the above.
• You’ll have to pay to repair the other person’s vehicle.
• You’ll have to pay for their medical costs.
• If you can’t, the other person will take you to court.
• If you still can’t pay, you might have to declare bankruptcy.
• Your car insurance premiums in the future will rise even more for causing an accident without insurance.

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Is Insurance More Expensive After A Lapse In Coverage?

Yes, you can expect higher rates after having a lapse in coverage even for one day. Generally, there isn’t an easy way to suspend your insurance without paying. If you cancel it, you have to give your license plates and registration to the state. So if an insurance company finds that you had a registered vehicle without coverage, it will view you as a high-risk driver.

Even if you don’t get caught driving without insurance by the police, your last insurance company will let the state DMV know when your coverage ended, so the next insurance company you talk to will know that as well.

In the eyes of the insurance company, you could have driven your car during the lapse, and that’s risky behavior. So, don’t let your insurance lapse.

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Our Recommendations For Car Insurance

Receiving a notice of nonrenewal or cancellation from your insurance company is not fun. But now is the time to kick things into high gear and find a new insurance provider. You can still find coverage. If it’s more expensive right now, it will come back down in a few years when the cancellation is off your record.

Here are a few auto insurance companies to reach out to for high-risk coverage. It’s smart to get several quotes and compare coverage and rates.

Use our tool below to start comparing quotes from top car insurance companies:

State Farm: Best Overall Provider

State Farm auto insurance also offers good coverage options and discounts. The Steer Clear^® app is a great way for drivers under 25 to get a discount for increasing their driving skills. Young drivers can also take advantage of a 20 percent student discount for having good grades. Those discounts add up, and they aren’t based on your driving record or insurance history, which is helpful.

Learn more in our State Farm insurance review. 

Progressive: Best For Usage-Based Insurance

In our review of Progressive car insurance, we found that the car insurance company performed well across areas like cost, discounts, availability, and coverage options. The Snapshot^® usage-based program is a great way for safe drivers to unlock premium discounts. 

One of Progressive’s notable features is its quotes comparison tool. By using that, you can see other quotes from multiple insurance companies. The companies you see will be ones that offer you insurance based on your particular background. That can make shopping for insurance a bit less hectic during this transition time.

Read our Progressive insurance review for a closer look.

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Canceled Car Insurance: FAQ

Below are some frequently asked questions about canceled car insurance:

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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