policy, it generally stays on your insurance record for up to five years, but it could be longer. Depending on the reason for cancellation, it could result in you needing high-risk car insurance.
Some car insurance providers look at your insurance record for continuous insurance or cancellations
A canceled car insurance policy can stay on your record for five or more years
An insurer can cancel your car insurance for various reasons, some of which will affect your future car insurance rates
How long does canceled car insurance stay on your record?
Whether your car insurance policy has been canceled for late payment or non-renewal, it stays on your insurance record for about five years in most cases. Sometimes, it could be longer. While it may not seem like a huge deal, a history of canceled car insurance can result in the need for
, which comes at a steeper price than regular insurance.
Most states implement laws about when your car insurance policy can be canceled, so depending on where you live, you should be given between 15 and 45 days’ notice before you’ll need to find a new policy. You will receive a cancellation notice in the mail specifying the end date of your coverage. If you have pre-paid for your policy, you should receive a refund for the unused amount.
That said, a canceled insurance policy on your record can raise your rates when you’re looking for a new policy. If you renew your policy within a month, you may only see a slight increase of usually less than 10%, but if your insurance lapses for more than 60 days, your rates may increase by as much as 50%. In other cases, an insurer may deny coverage if your policy has been lapsed for too long.
But canceling your insurance policy means more than spoiling a clean insurance record. It comes with several other consequences, including:
Administrative fees: Depending on where you live, you may be liable for additional costs for letting your insurance lapse, with fees further increasing after 30 days.
Vehicle repossession: Most lenders require drivers to purchase
and collision coverage on leased vehicles, along with certain liability limits. If your insurance lapses, you could have your car repossessed.
Driver’s license and registration suspension: Nearly all states require drivers to carry car insurance or proof of financial responsibility. If your insurance is canceled and your local department of motor vehicles (DMV) is notified, they could suspend your license and vehicle registration.
Why might an insurance company cancel your car insurance policy?
There are several reasons why your insurance company may cancel or choose not to renew your insurance policy. But reinstating it or finding a new insurance plan may be tricky, depending on why it's canceled.
Non-payment of premiums
Most car insurance companies offer a grace period for drivers to complete their car insurance payments without having a lapse in insurance coverage—grace periods are usually around 7 to 15 days—which means a few missed days might not be a big deal. But if your car insurance premium has gone unpaid for longer than the grace period offered by your insurer, you risk having your policy canceled, which means you’ll have to apply for a new policy.
. Lapses of less than 30 days increase premiums slightly, whereas lapses over 30 days can increase rates by more than 50%. An insurer may sometimes deny you coverage, which means you’ll have to switch providers.
Letting your insurance lapse due to non-payment also suggests you are a high-risk driver, meaning you’ll likely pay higher-than-average rates and need to find insurance through a company that offers high-risk insurance.
Your insurance provider can also choose not to renew your policy at the end of the term. If you’ve received a notice of non-renewal, it can be for several reasons, some of which include the following:
Moving out of state, especially if your current provider is more local or doesn’t cover other states
Your policy is being discontinued for reasons to do with the insurance company, such as if they are going through a relocation or business practice change
You purchased a new car not covered by the company, such as a commercial vehicle
You’ve filed multiple insurance claims within a specific period
In general, insurers will provide a 30-day notice of non-renewal, but they can also issue non-renewals for non-payment, in which case they may provide you with shorter notice.
A non-renewal is normally for a significant issue on the record of the policyholder or a driver on the policy. Although non-renewals provide plenty of time to find a new provider, the reason for the non-renewal is often significant enough to affect the ability to get a policy with another provider. Things like DUIs, multiple claims, or accidents will make you seem too high of a risk for that company to insure, and can make it harder to find insurance with another provider.
Your driver’s license was suspended or revoked
A suspended or revoked driver’s license is serious business and indicates to insurers that you’re a high-risk driver. Because risky drivers are more likely to file claims, not all insurers want to take them on. If you’ve recently had your license suspended or revoked for a serious offense—
What to do if your insurance company cancels your car insurance
If your car insurance provider has canceled your insurance policy, don’t stress yet. The process is relatively straightforward if you are eligible to reinstate your auto insurance policy, either through paying your bills or resolving the issue that led to the cancellation. However, getting your insurance policy reinstated for a high-risk policy or after a non-renewal can be a bit more complicated.
Here’s what you should do if your car insurance policy is canceled.
If your coverage hasn’t lapsed
If you haven’t had a car insurance coverage lapse but missed payments, your policy won’t be canceled immediately. State laws require insurers to notify you before canceling your policy, and most insurers offer a grace period of anywhere from 7 to 30 days for you to complete the payment.
If you make your payment within the grace period, your insurer will reinstate your policy, and you’ll avoid a lapse in coverage. The reinstatement will also not be recorded on your insurance record, nor will a coverage lapse. However, in some states, a bad payment history can impact your rates, especially if it comes with a lapse in coverage.
To get your policy reinstated, contact your insurer by phone or online. In some cases, you may need to fill out a reinstatement form, sign a statement of no loss, and pay any reinstatement fee to restore your policy.
If your insurance coverage has lapsed
If you’ve let your car insurance policy lapse due to non-payment, especially if it’s more than 30 days, your insurance provider may deny your future coverage. A coverage lapse indicates to insurers that you are a high-risk driver, which insurers are more reluctant to cover. In this case, you’ll need to apply for a new policy—and your lapse will show on your insurance record, which likely means a higher rate.
That said, some insurance providers will reinstate an insurance policy after the grace period, but it depends on the provider. If they agree, you’ll likely have to pay your outstanding premium upfront and a fine before they reinstate your policy.
But before your policy is activated, you will have to sign a no-loss statement indicating that you did not experience any losses during your coverage lapse and will not file a claim for any losses during this period.
If you can’t reinstate your policy and you need a new one
If you can’t find insurance through your original provider, your best bet is to shop around and get insurance quotes from several providers to see which auto insurance company can offer you the best coverage for the best rate. If your insurance provider sent a non-renewal letter instead of a cancellation, a standard policy should be easy to find. If the non-renewal was due to a serious traffic infraction or spotty driving history, you may have a harder time finding a standard insurance policy.
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Can insurance companies check if you have had an insurance cancellation?
Yes—insurance companies can check your record to see if you’ve had continuous auto insurance, including any policy cancellations. A gap in insurance coverage indicates you’re a high-risk driver, which may impact your insurance rates or their willingness to insure you.
Is there a time limit to get a new policy after a car insurance cancellation?
No, but driving without insurance is illegal in nearly all states, so if you’re planning to get behind the wheel of a car, you’ll need to get a new policy ASAP. The penalties for driving without insurance vary by state, but they generally include a fine between $150 to $1000 or more, as well as potential license suspension, coverage denial, and financial responsibility.
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