Is it Possible for Your Insurance Company to Drop You After a Car Accident?
Unless you’re a high-risk driver, it’s improbable.
It’s conceivable that an insurer may terminate a coverage after only one accident, although this is unusual. If the accident results in the revocation of your driver’s license or is caused by driving under the influence (DUI) or driving while drunk, the insurer is more likely to terminate the coverage (DWI).
In certain jurisdictions, insurers are permitted to terminate a policy during the first 60 days of its issuance. As a result, if a policyholder has a small accident within that time, the insurer has the option to terminate the coverage. Insurance plans are often canceled due to fraud, payment default, and unregistered automobiles.
Important Points to Remember
• Insurance companies may refuse to renew or cancel a vehicle insurance coverage if the driver has a history of accidents and driving offenses, or if the driver has been convicted of DUI/DWI.
• A DUI/DWI may result in the loss of driving privileges, inability to get auto insurance, or a high-cost insurance policy.
• Insurance companies are required to give notice of policy cancellation before terminating a policy.
Drivers in High-Risk Situations
Automobile insurance companies exist to make money, and they do it by hedging against risk. A single accident might result in a higher premium, but insurers classify you as a high-risk driver if your recent driving record is filled with accidents, speeding tickets, and other moving infractions.
Rather of canceling a high-risk policy, insurance firms frequently wait until it is time to renew it and then either hike the prices or refuse to renew it.
Convictions for DUI or DWI
Driving while under the influence of drugs, alcohol, or controlled substances is never a smart idea. Insurance companies are more likely to terminate a driver’s insurance if he or she has been in an accident while driving while intoxicated. If such drivers are permitted to keep their driver’s licenses, their auto insurance costs are certain to increase. If your policy is canceled, it might be tough to locate another provider that would cover you if you have a DUI or DWI conviction.
Responsibility Statement (SR-22)
Most insurance companies refuse to cover drivers who have lost their driver’s license. The state Department of Motor Vehicles (DMV) will demand a certificate of insurance, sometimes known as a Statement of Responsibility or SR-22, to restore those privileges. The SR-22 verifies that the high-risk motorist has the state’s minimum coverage requirements.
High-risk drivers with a history of at-fault, uninsured vehicle accidents, and/or DUI or DWI convictions are usually obliged to have it. The paperwork must be filed with the DMV by insurance companies, however, it is not free. The insurance provider will often demand high prices for basic coverage since the SR-22 indicates a high risk.
Important: Filing an SR-22 is not available from all insurance carriers.
Requirement for Cancellation Notice
Insurance firms are obligated by law to give notice of policy cancellation as well as the cause for the termination. The notification is typically delivered at least 30 days before to the cancellation date, although each state has its own set of rules. You will also be given the opportunity to submit an appeal to the insurance company on your behalf.
How Long Does It Take For An Accident To Show Up On Your Insurance Summary?
If you have to pay a higher insurance rate because of a poor driving record, it may not be indefinite. While each insurer’s regulations vary, in general, an accident that was mostly your responsibility and wasn’t a significant traffic offense, such as a DUI, will appear on your insurance summary for three years after the claim is filed. If you don’t have any more accidents within that period, your insurance premiums may drop when you renew your coverage.