Can Your Insurance Company Drop You After An Accident?

August 13, 2018

Getting into a car accident can be very unsettling for many reasons. Many people worry about how multiple claims will affect their auto insurance rates. Will your car insurance company cancel your policy if you have multiple accidents?

The first thing you need to know is that cancellation and non-renewal are two completely different concepts.

Cancellation vs. Non-Renewal

Cancellation

Cancellation refers to an insurer terminating your insurance prior to stated end date of the policy period. Generally, companies may cancel your policy within the first 60 days due to false information provided on your application or after 60 days if you are non-compliant with the terms of your policy or do not pay your premium. Keep in mind that insurance companies are required by law to provide you with a prior notice of policy cancellations. You are also permitted to make an appeal on your behalf to the insurance company.

Non-Renewal

Non-renewal refers to an insurer dropping you at the end of your current policy period. There are many reasons why you might be dropped, usually only if you are determined to be a “high-risk” driver. Keep in mind that you will not be dropped for discriminatory reasons such as age, race, gender, color, marital status, occupation, or physical handicap. Here are some typical reasons you may be dropped from your policy.

  • Bad driving record
  • DUI or DWI
  • Delinquent premium payments
  • Fraudulent claims
  • Too many at-fault accidents
  • Too many claims

Insurance companies pay attention to your driving history. If you accumulate a high number of traffic violations over a short period of time or receive DUI/DWI convictions, your insurer may consider you to be too great a risk and may drop you. The same goes with claims and at-fault accidents. If you have been involved in more than two accidents in a 3-year period where you were at fault, most preferred insurance carriers will not renew your policy.

Avoid Being Dropped By An Insurer

Ultimately, insurers are looking to insure those they consider “low-risk” drivers. The less claims you make, the better and the more claims you make the more risky you are to an insurer. The best way to ensure your company doesn’t cancel your policy or drop you is to take measures to practice safe driving every day. Here are some precautions you can take to avoid being dropped:

  • Drive Safely: Don’t drink and drive and follow the traffic laws.
  • Pay on Time: Don’t fall behind on your premium payments.
  • Be Honest: Always be honest when you deal with your insurance company. Don’t give false information or file fraudulent claims.
  • Avoid Unnecessary Claims: If you’ve been involved in a very small accident or incurred minor damage to your vehicle, you may want to consider paying for the repair out-of-pocket and leaving your insurer out of it. Although this can be a little frustrating, it can keep you from being dropped or having your premium increase.

Contact Us!

Don’t hesitate to contact us if you have any questions about your insurance policy or coverage options. Just give us a call at 415-386-2283 or email us at [email protected]!