Can your auto insurance company drop you after a claim?

Your auto insurance shouldn’t drop you after a claim but you can expect your premium to increase in some instances.

Free Auto Insurance Comparison

secured lock Secured with SHA-256 Encryption

Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

Full Bio →

Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 20, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to Remember

  • It’s unusual for an auto insurance company to drop you after an accident claim
  • They can decline to renew your coverage if you have a history of claims, a bad driving record, or have missed payments
  • If they decline to renew your policy, they must send you a letter citing the reasons for their decision

If you’ve been in a crash and have had to make an insurance claim, you have plenty to worry about as you try to get back to normal. Unfortunately, you may be concerned that your insurance company will be unhappy and refuse to cover you in the future. So, can your auto insurance drop you after a claim, and if so, what are the reasons? We’ve done the research for you to give you all the information you need.

If you’re looking for affordable auto insurance after your company drops you, just enter your ZIP code into our free quote comparison tool above to compare rates from reputable providers near you. 

Can your car insurance be canceled after an accident?

This decision will always be made on a case-by-case basis, and there is no hard and fast rule here. It also depends on who was at fault and the cause of the accident.

There are reasons why an insurance company may choose to cancel, but in most cases, it is unlikely. There will typically need to be mitigating circumstances as laid out below, but the company will most often continue to provide you with coverage. However, your insurance premium may increase. 

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

secured lock Secured with SHA-256 Encryption

Potential Reasons for Cancellation

Should a car insurance company decide to drop you, they may do so for one of the following reasons:

High-Risk Driver

If this is not your first claim or you have a poor driving record that includes speeding tickets, moving violations, or accidents, the underwriters may consider you a high-risk driver. Similarly, if you accumulate too many points on your driving record, this is another warning sign, and the provider may want to take a closer look. 

If you are an extremely high-risk driver, your car insurance may drop you for filing too many claims. Remember, these companies are there to make money, not lose money.

Driving Under the Influence

If the authorities prove that you were driving under the influence (DUI), your insurance company may decline to do more business with you. You are also likely to lose your license in this situation and may find it difficult to get future coverage.

Failure To Pay Premiums on Time

It’s not hard to miss a bill now and again, and you may forget to pay your insurance premium while your claim is outstanding. So long as you promptly submit the payment when you realize your mistake or after you receive a nudging letter from the insurance company, you should be okay. 

However, if the date of your claim corresponds with the month you did not pay for insurance, they may deny your claim and drop your coverage.

Provide False Information

Sometimes people make an honest mistake when filling out an insurance application, and in this situation, you may not need to worry too much. However, if you knowingly provide false information, this is insurance fraud, and apart from it being a criminal offense, it’s a reason for your provider to drop you.

What if the insurance company decides to cancel your policy?

If you get a notification from your insurance company that they want to cancel your policy, the procedure will typically be as follows:

  • You’ll get a letter from your insurance company explaining the reasons behind the cancellation.
  • This letter must include a specific cancellation date.

You may be able to resolve the situation by talking to an agent. If the reason given involved unpaid premiums, they might decide to reinstate your policy if you catch up on your missed payments. If you provided inaccurate or false information by mistake, you can explain yourself and see what happens.

Do I still pay insurance premiums after an accident?

You should continue paying your premiums as usual and on time. If the company informs you that they will not renew your coverage following the claim, they will cover you until the date of your next payment. Unless you can rectify the situation, you should stop sending premiums to this company at that point while you look for coverage elsewhere.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

secured lock Secured with SHA-256 Encryption

How much is car insurance after an accident?

On average, auto insurance may increase by $81 per month after an accident. It may be possible to get cheap auto insurance after an accident, and you can start the process by comparison shopping. Some companies will insure high-risk drivers or those with a poor driving record, so there will likely be options in most cases.

Take a look at how a single traffic violation increases annual auto insurance rates for a hypothetical 45-year-old male driver in the table below.

Average Annual Auto Insurance Rate Increase by Driving Violation
Driving ViolationAverage Annual Auto Insurance RatesAverage Rate Increase Percentages
Clean record$1,857.80N/A
DUI/DWI
first offense (3-5 years)
$2,013.008%
Cell phone/texting$2,108.4013%
Speeding (less than 20 mph over)$2,108.4013%
Speeding (more than 20 over)$2,108.4013%
At-fault accident$2,360.4027%
Reckless driving$2,360.8027%
Hit and run$2,360.8027%
DUI/DWI
(12-24 Months)
$2,360.8027%
DUI/DWI
second offense (3-5 years)
No Quote
Offered
No Quote
Offered
Get Your Rates Quote Now

Compare RatesStart Now →

The average rate increase for our hypothetical driver after a single traffic violation is around 19 percent. Expect your auto insurance rates after being dropped by your previous company to be potentially even higher.

Are you worried that your car insurance will be canceled after an accident?

Unless there are mitigating circumstances, it’s unlikely that your insurance provider will cancel your coverage after the claim. However, if they feel that you are a high-risk driver due to numerous claims, have a DUI, or have issues with paying your premiums on time, you may be at risk.

Are you ready to buy auto insurance after being dropped by your previous company? Now that you know why a car insurance company would drop you, enter your ZIP code into our free comparison tool below to find your new auto insurance rates.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

secured lock Secured with SHA-256 Encryption