Auto insurance exists because it’s a legal requirement that offers valuable financial protection. If you cause an accident, your car insurance provider will cover certain damages to reduce the amount you’ll pay out of pocket. Some people, though, are hesitant to file claims for fear of being dropped by their car insurers.
In most states, car insurance companies are unlikely to drop you after one claim and can only cancel your policy in specific situations. We have carefully reviewed the best car insurance providers to determine which ones are both reliable and willing to cover drivers after a claim.
Can Auto Insurers Cancel Your Policy After a Claim?
While your auto insurance can drop you after a claim in some situations, it’s rare for that to happen. Most states also have restrictions on exactly when insurers can drop or cancel a policy.
Insurers Can Usually Cancel Policies in the First 60 Days
In most states, car insurance companies can cancel policies for any reason within the first 60 days of coverage. If you make even a minor claim during those first two months, your provider could cancel your auto policy. Once again, though, auto insurance providers will rarely drop you after a single claim during this time frame.
After 60 Days, It’s Much Harder To Get Dropped
After the first 60 days, your car insurer will need to provide a specific reason to cancel your policy. Insurance laws vary by the state for what can lead to policy cancellation. Car insurance companies can almost always cancel policies if you commit fraud or miss payments, but state laws make it much more difficult after a claim.
Fraud includes lying on the initial insurance application or giving out inaccurate details for a claim. If you commit fraud by lying on any insurance paperwork or claims, expect your provider to cancel your policy upon finding out.
Missing payments could also lead your auto insurance to drop you. If you’re not willing or able to pay for the company’s services, that will count as a fair reason for cancellation or non-renewal.
Cancellation Versus Non-Renewal: What’s the Difference?
While your insurance provider can’t always cancel your policy after a single claim, they can opt for non-renewal. In that case, you’ll continue to have coverage until your policy ends, after which case you’ll need to search for a new insurer.
The benefit of non-renewal versus cancellation is having time to prepare. Even if your auto insurance drops you after a claim, it will most likely give you plenty of time to compare quotes on multiple new policies before your current option expires.
What’s Likely To Happen After a Claim?
Once again, your car insurance provider can cancel your policy for a single claim within 60 days of starting it. While this may be possible, it probably won’t occur since a single claim doesn’t indicate that you are an extremely high-risk driver.
Below, we’ll explain what’s most likely to happen after you file a claim for an at-fault accident.
Your Car Insurance Rates Could Increase
Though your car insurance policy is unlikely to be canceled, there’s a strong chance that you’ll face higher premiums for coverage. Expect a potentially significant price bump at the time of your next renewal, even if you currently have cheap car insurance.
One at-fault accident doesn’t mark you as an entirely reckless driver, but it does indicate that you could be somewhat risky to insure. Claims adjusters often respond by offering rate increases to make up for some of that potential risk.
While it’s not easy to find cheap auto insurance after an accident, it is possible. Make sure to compare quotes from multiple insurers to help you find competitive rates.
You Could Face Non-Renewal
Instead of canceling your policy in the middle of it, car insurers and underwriting companies typically wait until your current option expires. At that point, your provider could potentially decide not to renew your insurance coverage.
In this case, you’ll receive fair warning before your coverage ends. While your car insurance can drop you after a claim at the point of non-renewal, this option does not always occur after an auto accident. If it does happen, you’ll need to find a new provider to avoid becoming an uninsured motorist.
In most states, drivers are required to at least carry bodily injury liability insurance and property damage liability coverage. Places such as New York and Michigan require additional coverage types, so check your state’s department of motor vehicles to learn about your required limits.
Why Do Car Insurance Companies Cancel Policies?
A single auto insurance claim is unlikely to cause your auto insurance to drop you. The following situations, however, have much better odds of leading to a complete policy cancellation.
Missed Bill Payments
Like with any other bill, you must pay for your car insurance to avoid negative consequences. Most auto insurance companies offer a 30-day grace period for late payments. If you fail to pay by the end of the grace period or have missed several payments, your policy will often get canceled.
Lies or Fraud
No matter where you live, car insurance companies can cancel your policy for declaring false information on your application. Note that this includes lies of omission. Never put inaccurate details about your driving history on your application, even if your record isn’t the best. Your insurance premiums will likely be higher, but at least you’ll still have coverage.
Suspended or Revoked Driver’s License
If you can’t legally drive anymore, your car insurance company will likely cancel your policy. Instances like these often include situations when you develop a health condition that makes it impossible for you to remain a safe driver.
In almost all situations, you can expect steep car insurance rates after a suspended license. That’s because you’re likely to be considered a riskier motorist to insure than the average driver.
Filing Excessive Car Insurance Claims
While your auto insurance won’t likely drop you after one claim, the chances increase if you’ve filed several of them. If you have many traffic violations, at-fault accidents or speeding tickets, you may be marked as a high-risk driver. This can cause your car insurance provider to decide against renewing your policy.
Driving Under the Influence
If you’re caught driving under the influence, you’ll be marked as a high-risk driver and will likely have your license suspended. As such, it’s common for car insurance companies to cancel policies for individuals with DWIs or DUIs on their driving records.
Our Recommendations for Auto Insurance
If your auto insurance does drop you after a claim, you’ll need to search for a suitable new provider. You may also simply get multiple auto insurance quotes to see if you can find a lower rate after a claim. Make sure to consider GEICO, Progressive and State Farm when you compare car insurance quotes online or in person with insurance agents.
GEICO: Best Overall
GEICO is an excellent option for drivers who are looking for affordable coverage that’s also of a high quality. When getting an insurance policy from GEICO, make sure to consider extra offers such as rental reimbursement, mechanical breakdown insurance and roadside assistance.
Progressive: Best for High-Risk Drivers
High-risk drivers often turn to Progressive because of its willingness to cover policyholders who lack spotless records. The company offers extras such as accident forgiveness as well, and its deductible savings bank will reward those who go for certain periods of time without violations.
Learn more about the provider in our extensive Progressive insurance review.
State Farm: Best Student Discounts
Students are often marked as higher risks on the road due to their relative inexperience and higher rate of getting into car accidents. State Farm, though, is known for offering a wide range of savings opportunities to young motorists. The company also has multiple programs that incentivize safe driving, such as Steer ClearⓇ and Drive Safe and Save™.
Frequently Asked Questions
Can an insurance company drop you in the middle of a claim?
Your insurance company can drop you in the middle of the claim if it occurs within the first 60 days of starting a policy. Beyond that time, providers can only do so for reasons such as drivers lying about insurance information and missing payments.
When can an insurance company cancel your policy?
Companies can cancel your auto insurance policy without reason in the first 60 days. Otherwise, they can cancel the policy if you miss payments, are found to have lied about a bad driving record, have multiple moving violations or have a suspended or revoked license.
Can you cancel an insurance claim?
Yes, you can usually cancel a car insurance claim with ease by contacting your specific insurance provider.
Methodology
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, auto insurance rate estimates generated by Quadrant Information Services, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.
