
Sign up & start saving!
Get our weekly newsletter for the latest in money news, credit card offers + more ways to save
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Updated
Your car insurance can’t be canceled by your provider without cause. In most states, companies must give written notice of at least 30 days before canceling a policy. However, your insurer can refuse to renew your policy at the end of your current policy term.
While your insurer can’t drop you without reason or notice, there are a handful of situations that could cause them to cancel your policy. Acceptable reasons for canceling will also vary based on which state you live in.
Check your policy disclosure to view the reasons it could be canceled. Typical reasons can include:
Yes, in most cases, your car insurance provider can legally cancel your policy. But it must abide by state laws, which regulate acceptable reasons for cancellation.
You may also encounter a few exceptions where you might want to consider getting legal counsel to find out if you should fight the cancellation. There’s no guarantee you’ll win, but if you do, you could reinstate your policy or get a payout for wrongful cancellation. Potential examples of this might include:
Car insurers must give you notice if your renewal is being declined or your policy canceled. This must be in the form of a written notification, typically at least 30 days ahead of cancellation.
The severity of the situation can affect when your provider can cancel your policy and how much notice you’ll receive. Here are the timeframes to keep in mind:
Insurers are not generally required to provide this information unprompted, but often will.
If you ask for a reason, insurers are usually required to provide it. Similarly, insurers are typically obligated to provide details of their dispute resolution process if requested.
If you pay monthly premiums for your car insurance policy, it’s unlikely that you’ll get a refund for past premiums you’ve already paid, since those payments were for past coverage. However, if you opted to pay your premiums in a single lump sum payment for a six- or 12-month policy, you should get money back.
In that case, you should receive a prorated payment, where the overall cost would be broken down into days and any unused days would be refunded. But refund policies can vary, so check with your agent or provider for more information.
Say you paid $1,200 up front for a 12-month policy and your policy was canceled after 7 months. You would then receive payment for the remaining five months of unused coverage, based on the monthly rate of $100. That means you’ll get a $500 refund for the five months you already paid for.
Several factors can lead to a renewal being declined. Typically, it’s some variation on you being a statistically riskier driver than you were when you took out the policy.
This will often show up as higher premiums first. But eventually an insurer might simply consider the risk unreasonable.
A declined renewal could be any or any combination of risk factors an insurer considers, including:
The best way to avoid having a policy canceled is to be honest on your applications and claims, not commit insurance fraud and keep up with premium payments.
Making sure your renewal is accepted can be more difficult. Where possible, try to:
In some cases, you may be able to sort your situation out with your insurance company before your policy is canceled. Take the following steps to minimize any fallout from a missed payment:
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
Drivers who are considered high risk might find it difficult to find insurance at a reasonable rate or a company that will insure them at all. You might be considered high risk if you have multiple accidents, tickets, a DUI or other incidents on your driving record.
Your car insurance policy does offer some protection against sudden cancellation by your provider. As long as you avoid dangerous driving and pay your premiums on time, you shouldn’t worry about your car insurance policy being canceled.
While it can be concerning to think your car insurance policy could be canceled after one major driving mistake, you’re not without options if it does happen. Compare your options to find the right provider you can trust.
Reduce your debt by around 30% after fees — but only if you can stick with the program. Here’s how.
Don’t be fooled by false promises — here are red flags to watch out for and tips to find a legit company.
This insurer has four dental plans to choose from — compare costs and features now.
You can pay for car insurance in Bitcoin, even if your insurer doesn’t accept it yet.
Compare pros and cons of selling on Poshmark vs. Tradesy to help you get the most for your secondhand clothing, shoes and accessories.
This fintech just branched out into low-cost life insurance — but its lineup is limited.
Find unusually low face values for a whole life policy, ideal for supplemental insurance.
Learn your policy options based on the type of transplant and your health status now.
A health savings account (HSA) can help you get prepared for your retirement. Learn more.
Get pet insurance that reimburses 100% of your vet bills or a separate wellness plan.
Can a policy be cancelled due to vehicle not in garage?
Hi Joann,
Thank you for getting in touch with Finder.
If the car is for commercial use and it has garage liability cover then the policy would be cancelled if not in the proper car storage. Basically, it is the company who will send notice to the insurer to cancel the policy. If it is a personal car, you may contact your insurer about the level of your cover and the possible reasons on cancelling your policy.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni