Key takeaways
Insurers can drop you in two ways: cancellation during your term or non-renewal at the end of it
Most states limit insurers' ability to cancel new policies after the first couple of months, depending on the state
Why can your car insurance company drop you?
Car insurance companies may drop customers who become riskier to insure, but state laws limit when and why they can end coverage. If you drive safely and pay your premium on time, you're less likely to lose coverage.
How does an insurance company drop you?
When an insurer ends a policy, it does so in one of two ways: cancellation or non-renewal. The main difference is when your coverage ends.
- With non-renewal, the insurer lets the rest of your policy term run, then chooses not to continue your coverage.
- With cancellation, the insurer ends your policy on a set date before the term expires. In either case, the insurer provides written notice before your coverage ends.
Cancellation vs. non-renewal: What's the difference?
Here's how cancellation differs from non-renewal, according to the Insurance Information Institute (III):
| Cancellation | Non-renewal | |
|---|---|---|
| When it happens | CancellationDuring your policy term, before the expiration date | Non-renewalAt the end of your policy term |
| Why it happens | CancellationNon-payment, fraud, loss of driving privileges | Non-renewalRepeated accidents or claims, serious violations, insurer's business decisions |
| Notice you'll receive | CancellationWritten notice required (timeline varies by state and reason) | Non-renewalAdvance written notice, often 30 to 60 days before your term ends |
| Effect on future coverage | CancellationMay make finding a new policy more difficult | Non-renewalDoesn't necessarily raise your rates with a new insurer |
What situations can result in car insurance non-renewal?
Reasons for non-renewal of car insurance vary by state and insurer. These are a few of the most common:
Multiple accidents within a three-year window
Insurers often pay closer attention to accidents where you're at fault than to those where you aren't. However, being in multiple collisions — even ones where you aren't at fault — can be a red flag to insurers. Learn more about how accidents impact insurance.
Too many insurance claims
Filing multiple, frequent car insurance claims may make your insurer view you as a greater risk, which may lead to non-renewal. Insurers don't usually drop you after your first claim or two. The first step is often to raise your car insurance rate. If more accidents or claims follow, the insurer may send a notice that it won't renew your policy at the end of the term.
A pattern of serious violations
Repeated moving violations may push an insurer toward non-renewal because they can signal higher risk over time. A single ticket usually raises your rate rather than ends your policy, but violations can add up.
What events can cause car insurance cancellation?
An insurer can cancel a policy before the end of the term, though the reasons may vary by state. These are some causes that may trigger a car insurance cancellation:
Being convicted of a DUI
Once a driver is convicted of driving under the influence of drugs or alcohol, insurers may view them as a higher risk. Some insurers may choose to drop a customer after a DUI. Learn about insurance after a DUI.
Loss of driving privileges
If you lose your license or aren't legally able to drive, your insurer may cancel your car insurance. A loss of driving privileges can result from a DUI or other serious driving infraction, or it can be based on a medical condition that affects your ability to drive safely. See how car insurance works with a suspended license.
Late or missed premium payments
A single late payment may only trigger a late fee. But if payments remain overdue, or if you stop paying altogether, you may receive a cancellation notice. Non-payment is one of the few reasons an insurer can cancel a policy mid-term in most states.
Insurance fraud
Insurers generally have zero tolerance for insurance fraud. They'll likely cancel the policy of anyone who misrepresented information on an application or filed a fraudulent claim.
How do you know if your car insurance company is dropping you?
You generally won't be dropped by your auto insurer without warning. In nearly every state, insurers must notify you in writing before a cancellation or non-renewal takes effect. The notice must also explain the reason, according to III. Here are a few things to know about the notice:
- How it arrives: The notice comes in writing, by mail or email, so keeping your contact information current helps ensure you receive it and act quickly.
- Notice period: For non-renewal, many states require 30 to 60 days' notice before your term ends, which gives you time to find new coverage.
- Non-payment notices can be shorter: If you're behind on payments, the notice period before cancellation may be shorter.
Can you reinstate your car insurance after a cancellation?
Sometimes. Whether you can reinstate a canceled policy depends on your insurer and your state, so it's best to ask your insurer directly. Reinstatement is generally more likely when the cancellation was for non-payment than for a more serious reason, such as fraud or a suspended license.
If you can't reinstate your policy, your next step is to shop for a new one. Drivers who've been dropped may want to look into high-risk auto insurance.
What happens if your car insurance is canceled?
If your car insurance is canceled, don't drive without coverage. It's illegal to drive without insurance in nearly every state, and doing so may lead to:
- Fines
- License suspension
- Vehicle impoundment
- Difficulty finding coverage later
- Higher premiums in the future
A lapse between policies may also make it more difficult to find coverage and may increase your rate.
What to do if your car insurance company drops you
If you receive a cancellation or non-renewal notice, these steps can help you avoid a coverage gap in coverage:
- Read the notice and identify the reason. If it's something fixable, such as a missed payment, act on it right away.
- Ask about reinstatement, if applicable. If you were dropped for non-payment, ask your insurer whether reinstating is an option and what it would cost.
- Start shopping for a new policy. Shopping around for car insurance helps you compare rates and find an insurer that will cover you.
- Avoid a lapse in coverage. If possible, get your new policy in place before the old one ends to prevent a gap. If you can't avoid a gap in coverage, don't drive until you get a new policy.
- Arrange for an SR-22 or FR-44 if your state requires one. After certain violations like DUIs and driving without a license or insurance, your state may require an SR-22 or FR-44 form to prove you have coverage.
- Dispute the decision if you think there's an error. If you believe the insurer made a mistake, contact its consumer affairs department, then your state's department of insurance if needed.
Pro tip:
Progressive offers insurance after a DUI to drivers who hold a valid license and are legally able to drive. Progressive can also help you submit an SR-22 or FR-44 if your state requires one. Get your car insurance quote in minutes.
How many accidents can you have before your insurance drops you?
Each insurer has their own criteria for determining how many accidents are too many. It depends, in part, on whether you were at fault and how close together the incidents occurred. In general, insurers look at your record over about a three-year window. The first accident or two usually raises your rate rather than ends your policy, but a repeated pattern can lead to non-renewal.
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