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Can you cancel car insurance after an accident?

Important facts to know...
  • It the right of the person who pays the premium for an auto insurance policy to be able to cancel the policy at any time that he or she wants and to get a refund of the unused part of your premium
  • After an accident, if you are no longer able to drive a car that is damaged, you can have your auto insurance company immediately remove this car from your coverage so that you do not have to pay for it
  • You may also want to change auto insurance providers after an accident because you are not happy with the way that your claims process was handled by the insurer
  • Whenever you cancel your auto insurance coverage, you are entitled to a refund of your premium payment to the extent that any of it remains unused
  • If you go to cancel your auto insurance coverage, you will need to get a different policy if you are still going to drive your car or purchase another car

The process of canceling your auto insurance coverage is not complicated at all, but you do need to make sure that you are not left without any other type of coverage if you are still driving a car.

You may just need to have the damaged car removed from your policy because you are no longer going to drive it.

In that case, you should maintain the rest of your coverage so that you are on record as being an insured driver.

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Your Provider Cannot Cancel Coverage Due to an Accident

It is important to understand that even though you have the right to cancel your coverage, your auto insurance provider does not have this same right after 60 days have passed into your policy term.

The only way that an auto insurance company can cancel a policy early is in the event of fraud, misrepresentation or failure of the policyholder to timely pay for its premium.

It is possible that your auto insurance could not be renewed for another term after an accident, but you would get word of this cancellation decision from the insurer well in advance of when your policy term would end.

This does not mean that you are stuck without insurance options. You just need to act quickly to get another policy in place.

If A Car is Damaged in an Accident

If your car is damaged in an accident, you will certainly want to know how the damage will be repaired and paid for.

If your own insurance company pays for the damage because you were at fault for the crash, then your collision coverage will take care of this amount up to your policy limits.

It may be possible to cancel your coverage while a claim is still in the process of being paid out. The important thing for you to do is to make sure that you have given your insurer proper notice of this decision and that you get the required coverage elsewhere.

A lapse in coverage can occur when you go to cancel your current coverage before your new coverage kicks in.

If you are in the market for a new car after an accident, then you will need to get car insurance coverage for that new vehicle. If your new auto insurance company sees that you went a period of time without coverage, then this could mean that your insurance score drops.

You may have to pay a bit more for coverage.

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In these types of situations, it is always better to be safe than sorry. It is far better to wait to cancel your current coverage until you have the next policy lined up for the new vehicle that you are going to purchase.

This will ensure that you do not have to pay more than absolutely necessary for your new premium when getting new quotes for car insurance.

Once you do make the decision to cancel, you should be vigilant in making sure that you get a refund for your unused premium. The insurance company is required to return this to you, and you can use it to put towards your next premium.

If you think that you are going to wait a while to drive another car, then you may want to cancel your policy outright because you do not have any car that needs coverage.

While you are certainly entitled to do this, you should think carefully about the effect that it will have on your coverage down the line. The longer you go without coverage, the more you might have to pay for insurance later on.

Canceling Car Insurance Coverage After an Accident

You are entitled to stop your car insurance coverage at any time. After an accident, you may no longer need to have coverage for a car that you are unable to drive.

In addition, you could be unsatisfied with the way that your auto insurance company handled your accident claim and want to go with another company.

Before you speak with your insurance company to cancel, double check to make sure that you will have some other type of auto insurance coverage ready for you if you still need to drive.

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