Can My Auto Insurance Be Cancelled Due to Accidents?

Accidents do happen and that is one of the reasons why you buy auto insurance coverage. Naturally, you would expect your insurer pay for your looses if you suffer reasonable damage to your vehicle. If you caused injuries and damages to other people, they would certainly make a claim on your policy. This is a normal process and you may just count yourself unlike to get involved in a crash and lucky to have insurance.

First of all, accidents aren’t equal. You cannot do anything about someone crashing onto your parked automobile. It isn’t your fault at all and you can claim on their policies if you know who they are. Your policy isn’t likely to be affected when you are not at fault and another insurer pays for your damages.

At fault accidents are the types of claims that grab your insurers attention. Those are clear indications that you are not as reliable driver as they thought when they issued you a policy. Yet, anyone can have one unlucky incident. This is certainly how would your carrier view if it was your first incident for a long while.

Policyholders with about five years of no claim history can actually choose to buy accident forgiveness cover that will prevent your rates going up after the first accident. Not only your policy wouldn’t be cancelled but also you may not see premium increase at renewal if you have accident forgiveness.

On the other hand, you should start worrying about a possible non-renewal if this is your second at fault accident in the last three years. Depending on your insurer, you may face non-renewal of your policy or substantial premium increase. If your policy is less than 60 days old, most states allow insurers to cancel a policy with very little excuse and an at fault accident would be more than enough reason to cancel a policy before renewal date.

Generally, insurance companies can be classified as standard and non-standard. A well-known company with millions of policyholders can choose not to insure certain types of risky motorists. But there are substandard insurers who cater for those people who are left out by the mainstream providers. They are less choosy but their rates are usually much higher than standard providers.

Once you are fallen off the preferred risk category, it may take you several years of good driving records before a standard insurer with good rates want to insure you. In other words, being labeled as high-risk driver could cost you a lot of money in those years.

So, it is not the end of the road if your auto insurer drops you. You can still get coverage even though it would most likely be from a less reputable insurer and with much higher rates. This is assuming you are dropped because of claims. Companies drop coverage for many other reasons including a strategic market positioning and high claims from other policyholders in the region. If it wasn’t due to something you have done you shouldn’t have much problem finding an alternative insurer.

Accidents usually result in higher premiums for about next three years. If you just had one, you need to deal with its consequences, whether it is higher rates from your current insurer or finding another provider because you are dropped. Don’t just accept the next quote and take your time to find the best policy in your current circumstances.

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