What to Do if Your Car Insurance Is Canceled

Q: What do you do when your insurance company drops your coverage?

If your insurer drops your coverage , apply for reinstatement or switch to another provider. Assess your needs to decide if minimum coverage suffices or if full coverage is a better choice.

Q: Is it hard to get car insurance after policy cancellation?

Depending on why your provider discontinued coverage , getting car insurance after a canceled policy can be challenging, especially if you're considered high-risk. However, providers specializing in high-risk drivers may offer coverage. If you plan to keep driving, secure insurance immediately to avoid a lapse. Be prepared for higher premiums due to the increased risk.

If you receive a cancellation notice, contact your insurer to see if reinstatement is an option. You can also seek new coverage, though rates may be higher.

Find out if you're overpaying for car insurance below.

By Mark Fitzpatrick

Edited by Venus Zoleta

Updated: April 14, 2025

Advertising & Editorial Disclosure

Key Takeaways

If you think the cancellation is unfair, you can file a complaint with your state insurance department. It may investigate to see if the cancellation was justified.

Car insurance cancellation is usually due to a bad driving record, license or registration suspension, felony conviction or fraudulent information.

Insurers may choose not to renew your policy because of nonpayment, frequent claims, discontinuation of a particular plan, reduction of insured in your area or end of business.

What to do After Your Car Insurance is Canceled

If your car insurance is canceled, act quickly to avoid coverage gaps and penalties. Insurers are legally required to notify you in writing, including the cancellation date. Here are the steps to regain coverage and stay protected:

Read the cancellation notice carefully

Your insurer must notify you in writing if your policy is canceled, including the reason and the effective date. Make sure you know when your coverage ends to avoid driving uninsured.

Contact your insurer

Call your insurer right away to ask for details about the cancellation. If it was due to a missed payment or paperwork issue, you may still have time to resolve the problem and reinstate your policy.

Address the reason for cancellation

Find out why was your insurance canceled — whether it’s for missed payments, a suspended license or incorrect information — and take steps to fix it. Resolving the issue quickly can help prevent complications with future coverage.

Avoid driving without insurance

Don't drive unless you have active insurance. Driving without coverage can result in fines, license suspension and other penalties.

Set up reminders to prevent future cancellations

To avoid future issues, consider setting up automatic payments, calendar reminders or regular reviews of your policy to stay up to date on payments and paperwork.

Reasons Why Your Car Insurance is Canceled

Insurance companies can cancel your policy for several reasons, many of which are tied to risk or policy violations. Understanding why cancellations happen can help you avoid them — or address issues if your policy is already at risk. Here are some of the most common reasons insurers may cancel car insurance:

Bad driving record: Multiple moving violations or at-fault accidents within a specific timeframe can result in policy cancellation, as insurers may classify you as a high-risk driver.
License/registration suspension: Auto insurers often review your driving record through the state’s Department of Motor Vehicles or a similar agency. If they discover a license suspension, they'll likely cancel your policy. License suspensions are often linked to major traffic violations, such as at-fault accidents.
Felony conviction: A DUI can cause you to get convicted of a felony, classifying you as a high-risk driver.
Fraudulent information: Giving false information to your provider for a claim will cause insurance cancellation. Also, using falsified documents is against the law.

How to Get Car Insurance After Cancellation

You can usually secure car insurance after a policy cancellation, but new rates may be significantly higher if you don’t contest the cancellation. To address a cancellation, consider challenging it and seeking your state insurance department's assistance. Follow these steps:

1
Apply for reinstatement
Upon receiving a cancellation notice, contact your insurer immediately. Clarify the reason for the cancellation and address any misunderstandings. Ask if reinstating your policy is an option.
2
Contact your state insurance department
If you believe your policy was unfairly canceled, file a complaint with your state’s insurance department. The department can determine if state laws protect you from cancellation for reasons like age. They may also investigate to assess if the insurer’s decision was justified.
3
Consider a residual market plan
Residual markets help high-risk drivers get car insurance when regular companies won’t cover them. Insurance providers work together in these markets to share the risk of insuring these drivers.
4
Shop for a new policy
If your policy was canceled for a valid reason and can’t be reinstated, get a new policy quickly to avoid a coverage lapse. Compare quotes from different insurers to find affordable coverage that meets your needs.

Difference Between Car Insurance Cancellation vs. Nonrenewal

Pay attention to how your insurer ends your policy, as cancellation and nonrenewal differ in causes and consequences. Cancellation occurs midterm and is typically more serious, while nonrenewal happens at the end of the policy term. Here's a clearer look at the difference between cancellation and nonrenewal:

Cancellation

This happens during your policy term for serious reasons, like missed payments, license suspension or false information on your application. Cancellation often has immediate consequences and can make finding new insurance harder, potentially leading to higher premiums.

Nonrenewal

This occurs at the end of your policy term and may happen due to business changes, like leaving your state or selling fewer policies, or a high-risk driving record. Nonrenewal is less severe than cancellation and gives you more time to find a new policy.

Your car insurance costs may rise after your provider drops your coverage. The increase depends on why your coverage ended and whether it was canceled or not renewed.

MONEYGEEK EXPERT TIP

When shopping for car insurance, ask if the insurer offers monthly payments instead of requiring full upfront payment. Paying in full can save money overall, but no-down-payment options provide coverage with minimal upfront costs.

Reasons for Nonrenewal of Car Insurance

Unlike cancellations, nonrenewals occur when an insurer decides not to extend your policy after its term ends. This can happen for various reasons, some within your control and others beyond it. Here are common reasons insurers choose not to renew car insurance policies:

Nonpayment: Maintaining auto insurance requires paying the premium as stated in the policy’s terms and conditions. If you fail to make the necessary payments, your insurer can revoke your policy.
Frequent claims: Your insurance company may choose not to renew your policy if you file too many claims, especially if they’re at-fault claims.
Discontinuation of a particular plan: In some cases, an insurance company may decide to no longer offer your particular insurance plan. If that happens, they won’t renew your policy after it expires.
Reduction of insured people in your area: If your company decides to sell fewer policies or reduce the number of policyholders in your area, they may choose to discontinue your coverage after its term ends.
End of business: Nonrenewal can also happen when your insurance provider stops doing business in your area.

Can an Insurance Company Drop You for No Reason?

An insurance company cannot drop you for no reason. However, it can cancel your policy for missed payments, fraud or a suspended license. It can also not renew your policy if you’re deemed too high-risk.

Getting car insurance after a canceled policy isn’t as complicated as it may seem. However, your new policy will likely cost more. The process you’ll have to go through will depend on whether your previous insurance company dropped your coverage through cancellation or nonrenewal and what grounds led to that decision.

What to Do If Car Insurance Is Canceled: Bottom Line

In some cases, your car insurance company may stop your coverage through cancellation or nonrenewal. This guide explains common reasons for cancellation and how to avoid a coverage lapse. Getting new insurance after cancellation is crucial to driving legally, though it’s often more expensive.

What to Do After Car Insurance Cancellation: FAQ

Below are frequently asked questions to help you better understand how car insurance cancellation and nonrenewal work:

Can an insurance company drop your coverage?

An insurance provider can drop your coverage if you violate any of your policy’s terms and conditions.

Does car insurance get canceled after an accident?

Car insurance isn't automatically canceled after an accident. However, in some cases — such as repeated at-fault accidents in a certain period — your insurer may revoke your policy.

What do you do when your insurance company drops your coverage?

If your insurer drops your coverage, apply for reinstatement or switch to another provider. Assess your needs to decide if minimum coverage suffices or if full coverage is a better choice.

Can you still get car insurance after your company cancels your coverage?

You can get car insurance after cancellation.

Is it hard to get car insurance after policy cancellation?

Depending on why your provider discontinued coverage, getting car insurance after a canceled policy can be challenging, especially if you're considered high-risk. However, providers specializing in high-risk drivers may offer coverage. If you plan to keep driving, secure insurance immediately to avoid a lapse. Be prepared for higher premiums due to the increased risk.

Getting Car Insurance After Cancellation: Our Review Methodology

MoneyGeek analyzes car insurance rates using data from hundreds of insurers, drawing on information from these trusted sources:

AM Best: Provides credit ratings and data analytics for insurance companies
J.D. Power: Specializes in insurance research, analytics and rankings
National Association of Insurance Commissioners (NAIC): Regulates the insurance industry, offering data and analysis to help consumers make informed decisions
Quadrant Information Services: Delivers car insurance pricing analytics and comparative data

At MoneyGeek, we strive to maintain clear and transparent editorial standards. Our editorial team researches relevant topics, addresses frequently asked questions and ensures accuracy by conducting thorough research, editing, fact-checking and reviews throughout the editorial process.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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