What to do when your car insurance is canceledHaving your car insurance canceled or getting dropped by your insurance company feels horrible… and mysterious. What did you do? How can you get car insurance again? Who can help? There are many reasons why an insurance company might choose to cancel or not renew a customer’s policy, and thankfully, an equal number of ways to fix the situation. Read on for step-by-step instructions to get insured and stay on the road, with help from your friends at Direct Auto & Life Insurance.
1. Relax. You have options.
Take a deep breath before you tackle the problem. The great news is, you have options! Learn more about your situation before you start making frantic phone calls. Everything is going to be okay.
There are many reasons why your auto insurance company dropped you. The most common reasons for insurance cancelation include:
- Non-payment. Did you forget to pay for your car insurance? The most common cause of cancellation by the insurance company is nonpayment of your premiums. Some insurance companies will allow you to pay your balance within a specific time frame and reinstate your policy.
- Too many accidents or traffic violations. Insurance companies can cancel or non-renew a customer's insurance for major traffic violations such as DUIs or violations that result in driver's license suspension, or for making too many claims on their insurance within a certain time span.
- No reason. No reason isn't much of a reason, we know, but many states allow insurers the right to cancel your car insurance within the first sixty to ninety days of your policy (often called the “underwriting period”) without having to state a reason. Insurance companies will often do this if they find discrepancies in your policy application, so it pays to be honest when you first apply for a car insurance policy.
You might be able to fix the situation right away depending on the reason you were dropped. If you can pay your bill, pay it. Otherwise, call your car insurance company and ask if you can work together to find a solution.
2. Don't drive without car insurance.
No matter where you live, driving without insurance or financial responsibility is against the law. Don't do it! From Florida to Oregon, you'll face a penalty of some kind for driving with canceled car insurance. Penalties vary by state, but can include:
- Driver's license suspension
- Vehicle registration suspension
- Tickets for no insurance
- Jail time
- Civil and criminal penalties if in an accident
- Fines that range from $100 to $1,000
- Having to meet SR22 requirements for 3 to 5 years
Being notified that you’ve been dropped from your insurance can be highly stressful, as you're not legally allowed to drive without it. While you work to get insurance again, take public transportation. Ride your bike. Listen to a podcast as you walk to work. Ask friends or family members for a ride! It may be a little inconvenient, but it's better than losing your driver's license or facing jail time.
3. Apply for a new car insurance policy.
Drivers who aren't eligible for reinstatement can apply for a new car insurance policy over the phone, online, or in-person. Direct Auto works with all types of drivers, even those who have less than perfect insurance histories.
Maintain continuous coverage with your new car insurance policy to not only avoid another drop, but also to avoid higher premiums and be eligible for policy discounts (i.e. renewal discount / prior insurance discount).
4. Prepare yourself for different insurance rates.
Chances are, if you’ve been dropped due to nonpayment or excessive violations and claims, you’ll be considered a high-risk customer and could face higher insurance rates. Some insurance companies may choose not to work with you if you've been dropped by another insurance company.
Here at Direct Auto, though, we do things differently. We believe everyone deserves affordable car insurance and we encourage all drivers to apply for coverage — regardless of their driving or insurance history.
If you’re worried about your current insurance company canceling or not renewing your car insurance, if you're having a hard time finding insurance after an accident, or if you’re just shopping around for new rates, it's time to reach out to us. We may be able to offer you the car insurance you need at a competitive rate. Call 1-877-GO-DIRECT (1-877-463-4732), click to get a quote online, or come into a Direct Auto location near you today to learn more!