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Getting an Auto Insurance Quote After Your Policy is Canceled

April 16, 2015
Auto Insurance, Insurance
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No one likes to spend their spare time getting auto insurance quotes, but the process is especially stressful if your auto insurance has been canceled. Not only will you be scrambling to find affordable new coverage, but the reason your policy was canceled could make it hard to find a new policy with one of the major auto insurance companies. Even so, it is possible to drive legally even if you have an imperfect record. You’ll just have to pay extra.

Reasons for cancellation 

Once you’ve had an auto insurance policy for 60 to 90 days, most states mandate that your coverage can be canceled only for a few specific reasons. These usually include:

  • Non-payment. Missing your premium payment deadline by a few days probably won’t cause your auto insurance to be canceled. But if you ignore repeated reminders and don’t catch up on your payments, you may find yourself without a policy.
  • Fraud. If your insurance company finds that you misrepresented yourself — perhaps by lying  on your application or faking an accident to file a claim — your policy will be canceled. You also could face criminal charges.
  • A major moving violation. Convicted of a DUI? You may well need to find another insurer. Being involved in a high number of accidents or receiving multiple traffic tickets also might lead to cancellation.

If your policy is going to be canceled, your insurer has to give you notice. How much notice is set by state law: at least 10 days in Wisconsin and Texas, for example, and 10 to 20 days (depending on the reason) in California. This gives you time to find other coverage. But depending on why you were canceled, you may have to try a few insurers before you find one willing to cover you. In addition, you may have to find an insurer who specializes in risky drivers, such as The General or Titan, and you may have to pay more for the coverage you do find.

Lapses affect your ability to get insured

If you ignore a cancellation notice, you put yourself at a major disadvantage for obtaining new auto insurance coverage. When your current policy is canceled, your insurance will lapse. Insurance companies prefer drivers who have maintained continuous coverage. Having a lapse is another red flag on your record for insurance companies, on top of the initial reason your policy was canceled.

As a driver, it’s your responsibility to have auto insurance. Even if you’ve lost your license, your state may require you to carry some coverage before they’ll reinstate your driving privileges. So it’s in your best interest to keep your insurance current.

You may have other options

In rare cases, your car insurance cancellation might not be final. For example, if you have a good reason for not receiving payment notices, you may be able to pay up and get your policy reinstated. Your insurer is more likely to agree to this if you act quickly after receiving the cancellation.

On the other hand, if you’ve committed fraud or caused a major accident, you’ll probably have to get auto insurance quotes from another carrier. If no other company will take you, contact your state’s assigned risk plan. These programs can help you find coverage if you’ve been unsuccessful elsewhere. If you maintain a good record, you’ll eventually return to the standard market.

No matter why your insurance is canceled, it’s important to act fast. The sooner you reach a deal with your insurer or find new coverage, the sooner you can get back on the road worry-free.

Alice Holbrook is a staff writer covering insurance and investing for NerdWallet. Follow her on Google+.

Image via iStock.