What to Do if Your Auto Insurance Company Drops You
What to do after your auto insurance company drops you can be as easy as calling your agent to find out why you lost coverage and what you can do to reinstate it. If you don't agree with your provider, you can file an appeal with your state insurance department. When your car insurance drops you, you will have at least 30 days to find new coverage.
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UPDATED: Apr 23, 2021
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- Auto insurance companies will drop you if you lie on your insurance application, fail to pay your premiums on time, or if you’re charged with a DUI.
- State laws require that insurance companies notify you of cancelation or nonrenewal at least 30 days before the cancellation date.
- You can make an appeal to your state insurance department if you disagree when your car insurance company drops you.
Learning what to do if your auto insurance company drops you takes more than finding out how many claims before State Farm drops you. You will have to do a little research, and you may have to shop around for cheap SR-22 insurance if you lost coverage due to a DUI.
Is it legal for a car insurance company to drop you? Unfortunately, yes.
On the bright side, your provider is required by law to alert you with a notice of cancellation at least 30 days before the cancellation date. During that time you can talk with an insurance agent about reinstating your coverage or make an appeal to the state Board of Insurance.
Keep reading to learn what steps to take and what to do when your car insurance drops you.
Start shopping for new coverage if your auto insurance company drops you with our free insurance quote tool below. Enter your ZIP code to start comparing car insurance rates from local companies.
What happens if your auto insurance company drops you?
Car insurance companies can drop coverage in one of two ways:
- Providers can choose not to renew your policy once your premium period ends, or;
- Providers can cancel your policy outright.
The key difference between a policy cancellation and nonrenewal is that a policy can only be canceled if you lied on your application, your driver’s license is suspended or revoked, or you haven’t paid your premiums.
Either way, your provider must give you a notice of cancellation or nonrenewal before your coverage period ends.
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Steps to Take after Your Car Insurance Company Drops You
Once you receive the notice of cancellation, here are the steps to take when your auto insurance company drops you:
- Call and speak with your insurance agent to see if there’s anything you can do to reinstate your coverage or renew your policy.
- Write a formal letter to the insurance company and your state insurance department to appeal the cancellation. Taking this route may require a lawyer.
- If you’re facing nonrenewal, start shopping around for new coverage from other insurance companies that are better suited for your needs.
- If your policy is canceled, it will put you in the nonstandard market, so be prepared to pay higher auto insurance rates.
Fortunately, you aren’t out of luck just because you were dropped by car insurance. There are many affordable high-risk auto insurance companies and more that offer cheap SR-22 bonds for drivers who have lost coverage due to DUIs and other charges.
Why would an auto insurance company drop you?
There are many reasons why an auto insurance company might drop you. Some of them might be out of your control. For example, if your provider goes out of business or insurance laws in your state change, your policy can be canceled.
Other reasons your provider might drop you are based on your driving record, criminal record, and medical record. You could lose coverage for:
- missing premium payments
- making multiple claims in a short period of time
- DUI charges or otherwise losing your license
- lying on an insurance application or claim
- high-risk driving behaviors
- medical conditions that impact your ability to drive
If you lose your auto insurance coverage, it’s important to find a new provider as quickly as possible. Driving without insurance is illegal in nearly every state and you could lose your license for driving without coverage.
Why do insurance companies drop you after a claim?
Insurance companies will only drop you after a claim if you lied during the claims process or if you file more than one claim in a short period of time.
Your insurance company may also drop you after a claim if the accident pushes you into the high-risk category. Numerous speeding tickets, drinking while driving, and vehicular manslaughter will make you high-risk.
Typically, three or more claims or accidents on your record can cost you your coverage. But now that you know what to do after your auto insurance company drops you, enter your ZIP code below to start comparing free auto insurance quotes from local companies before you buy.