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Can your insurer cancel your policy after an accident?

Can your insurer cancel your policy after an accident?

October 14, 2016
cancel your policy after an accident
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Although your auto insurance takes away a good portion of your monthly earnings, it’s still better to have one. The truth is, auto insurance can be a huge help, and most people are happy to have it. That’s why many drivers are curious to know if an insurer can cancel your policy after an accident.

It’s one of the most frequently asked questions and the answer will surprise. It is possible for an insurer to cancel a policy after one accident, but it’s highly unlikely. But, if the accident results in a suspended driver’s license or is alcohol- or drug-related, the chances of the insurer to cancel the policy are very much higher.

When your insurer can cancel your policy

When you are a high-risk driver

It’s no secret that insurers stay away from high risk, because it prevents them from making money. If you get into an accident, but otherwise you have a spotless record, your insurer won’t cancel you policy. However, if your record is full of moving violations, speeding tickets and other things that label you as a high-risk driver, you might end up without an insurance. But rather than dropping your policy right away, your insurer will probably wait until you have to renew it. At that point, they’ll either raise your premiums or simply not renew your policy at all.

When you drink and drive

Driving and alcohol don’t go well together. There are already a lot of bad things that result from it, without adding the possibility of losing your auto insurance. But insurance companies are much more likely to cancel a policy if a driver is involved in an accident while driving impaired. After such an event, your premiums will skyrocket. And, if they cancel your policy, you’ll have a really hard time finding a company that will insure drivers with DUI or DWI convictions.

What you need to know

The law requires insurers to provide prior notice before cancelling a policy. And you also have the chance to appeal against the decision.

Thomas Hookton

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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