Get Auto Insurance After Being Dropped: Your Options Explained

Getting dropped by your auto insurance company can be stressful, but there are steps you can take to get back on track. Firstly, understand why your policy was cancelled and how long you have to find new coverage. Common reasons for cancellation include non-payment of premiums, suspension or revocation of your driver's license, and dishonesty on your application. If your policy was active for fewer than 60 days, there may be additional reasons for cancellation. You can try to get your current provider to reinstate your coverage, especially if the issue was minor, such as a late payment. If that's not possible, you may need to find a new insurance provider, possibly a non-standard company that caters to high-risk drivers. Be sure to get a new policy before your current one ends to avoid a lapse in coverage, which can lead to higher costs.

High-risk auto insurance

If you've been dropped by your auto insurance provider, it's likely because you've been deemed a high-risk driver. This classification can result in extremely high insurance quotes and poor customer service, especially if you're forced to settle for a bargain provider.

There is no standard definition of what constitutes a "high-risk driver", and the amount of risk represented by a driver is subjective and varies between insurers. However, some common characteristics of high-risk drivers include:

• Multiple at-fault accidents
• More than one moving violation in recent years
• One or more vehicle-related convictions, such as a DUI
• Poor credit history and/or rating
• Inexperience or elderly age
• Ownership of an exotic vehicle

If you fall into one or more of these categories, you may be able to take steps to reduce your insurance premiums. For example, you could:

• Work on improving your credit score
• Take a defensive driving course
• Bundle your car insurance with other insurance options
• Opt for a low-mileage policy
• Take advantage of other discount opportunities, such as those for students or veterans

Even if you are considered a high-risk driver, you can still obtain auto insurance. Some insurance companies specialise in providing affordable and reliable insurance for high-risk drivers, and will not penalise drivers based on their past.

Non-renewal and cancellation differences

While non-renewal and cancellation both result in the end of your insurance policy, there are some key differences between the two.

Timing

Non-renewal occurs when your insurance company discontinues your policy at the end of the coverage period. Cancellation, on the other hand, can happen during the term of the policy or when the policy term is ending.

Reasons

A company may choose not to renew your policy because it no longer offers that type of coverage or because it has dropped coverage or no longer serves your area. Non-renewal can also occur if you have multiple moving violations or at-fault accidents, or if you've filed too many claims.

Cancellation, on the other hand, usually happens for more serious reasons, such as failure to pay your premium, committing fraud or misrepresentation on your application, or having your driver's license revoked or suspended.

Notice Period

Insurance companies are required by law to notify customers of cancellations and non-renewals within a certain time period, as dictated by the state. For non-renewals, this is generally 10 to 75 days, while for cancellations, it is typically 30 to 60 days before the cancellation date.

Impact on Future Insurance

Non-renewal does not generally lead to higher car insurance rates when you go to buy a new policy. However, cancellation is considered more serious and may make finding a new car insurance policy more difficult. You will likely pay more for car insurance after a cancellation, and a policy cancellation may give you problems when trying to buy a policy from another company.

Initiation

Both customers and companies can choose to cancel or not renew policies. Customers may choose to cancel their policy if they are switching providers or if their car is no longer in use.

Reasons for insurance cancellation

There are several reasons why an insurance company might cancel or not renew your policy. Here are some common reasons for insurance cancellation:

Non-Payment or Late Payment of Premiums

The most common reason for insurance cancellation is the non-payment of premiums. Insurance companies rely on timely payments from their customers to maintain coverage. If you fail to pay your premiums on time or miss too many payments, your insurance company may cancel your policy. It is important to note that missing a payment here and there might not lead to immediate cancellation, but it can result in late payment penalties. Most insurance companies offer a grace period for late payments, but consistent late or missed payments can be a red flag for insurers.

Excessive Claims

Filing too many insurance claims during your policy term can also lead to cancellation. Insurance companies view frequent claims as high-risk behaviour and may decide to drop you as a customer. This is especially true if the claims are related to at-fault accidents or if you have a pattern of causing accidents. While there is no set number of claims that will result in cancellation, insurers typically assess claims activity over a certain period, such as 36 months.

DUI or DWI Convictions

Convictions for driving under the influence (DUI) or driving while intoxicated (DWI) are often considered a reason for insurance cancellation. Such convictions indicate high-risk behaviour, and insurers may decide to cancel your policy or significantly increase your insurance premiums.

Loss of Driving Privileges

If you can no longer drive legally, your insurance company may cancel your auto insurance policy. This could be due to a suspended driver's licence resulting from a DUI, other major driving infractions, or a health issue that affects your ability to drive safely.

Fraudulent Claims

Insurance companies take fraudulent claims very seriously. If you file a claim or someone makes a claim against your policy, and you are found to have purposely provided incomplete or inaccurate information, your insurance company is likely to cancel your policy.

Other Reasons

Other reasons for insurance cancellation include failure to disclose necessary information in your application, medical conditions affecting your ability to drive safely, unsafe vehicles, use of the vehicle for business purposes, and changes in your location or risk factors.

Appealing a cancellation

If your auto insurance has been cancelled, you may be able to appeal the decision. The process for appealing a cancellation will depend on your location, but there are some general guidelines to follow. Firstly, it's important to act quickly as in most places, your complaint must be filed before the cancellation date. Contact your local insurance regulator to understand the specific process and requirements for your region.

In Massachusetts, for example, the Board of Appeal has jurisdiction to hear appeals from those whose insurance policies have been cancelled. The Board will make a determination following a hearing about whether the cancellation was appropriate. Hearings are conducted virtually, via video or telephone, and a representative from your insurance company will attend. You will need to mail or fax a completed Cancellation Complaint form and a copy of your Cancellation Notice to the Board of Appeal. There is no fee required to submit your complaint.

In most cases, insurance companies can cancel your policy within the first 60 days without providing a specific reason. After this period, most states require insurers to provide both you and your insurance agent with notice of their intention to cancel your coverage. This is usually at least 30 days, but laws differ between states.

If your health insurance has been cancelled, you have the right to appeal the decision and have it reviewed by a third party. There are two ways to do this: an internal appeal and an external review. For an internal appeal, you can ask your insurance company to conduct a full and fair review of its decision. If your case is urgent, the insurance company must speed up this process. For an external review, you can take your appeal to an independent third party. This means the insurance company no longer has the final say over whether to pay a claim.

Finding insurance after cancellation

If your car insurance has been cancelled, you should act immediately to avoid a gap in your coverage. Driving without insurance is illegal in almost every state and can lead to losing your license, having your car repossessed, or facing legal liability for an accident.

Contact Your Insurer

First, contact your insurance company to see if they will reinstate your policy. If your insurance was cancelled because you missed a payment, you may be able to reinstate it. Many insurance companies offer a grace period after a missed payment. During this time, your car insurance can be reinstated once you pay the missed premiums and any fines, interest, or fees.

Look for New Insurance

If your insurance company won't reinstate your policy, you'll need to look for a new provider. Even if your current insurer cancelled your policy, you may be able to find car insurance from another company that has different standards for issuing coverage. Get quotes from several insurance companies, making sure to compare the same type and amount of coverage.

Non-Standard Insurance Companies

If you're still having trouble finding a policy, look for an insurance company that sells "non-standard" car insurance for high-risk drivers. You may be considered high-risk if you have a record of unsafe driving, such as DUIs or multiple accidents. Your state's department of insurance or an independent insurance agent should be able to refer you to companies that sell non-standard car insurance.

Your State's Assigned-Risk Pool

If you can't find car insurance elsewhere, you can turn to your state's assigned-risk pool as a last resort. States create assigned-risk pools to ensure that even risky drivers have the minimum insurance required to drive. Insurance companies in these pools agree to provide car insurance to drivers regardless of how risky they are. However, expect to pay much more for assigned-risk pool insurance than you would for standard car insurance.

Frequently asked questions