There are different ways your car insurance policy can get canceled. You might cancel it because you've found a better deal with another insurer. An insurance company will cancel a customer's policy if they haven't paid their monthly premiums. Here's what you need to know about car insurance reinstatement after a policy is canceled.
The process of car insurance reinstatement involves restoring coverage of a plan that has been canceled. This process can be as simple as contacting your insurance agent and explaining your situation. You may need to submit a new application if you wait past the 30-day grace period following cancelation. But there's no guarantee an insurer will reinstate a policy once it's canceled.
The two types of car insurance reinstatements are those with lapses and those without lapses. Ideally, a reversal never happens because it can impact your future premium costs. It's easier to reinstate your policy if you don't have any lapse in coverage or payment. If you have a coverage lap, it will become part of your insurance history that other insurers can research.
Canceling a car insurance policy means terminating it before the end date of the policy period. The main reason for an insurer to cancel a car insurance policy would be if it discovered issues with your credit or driving record, such as suspension. The insurer might also drop an applicant with a history of not paying their premium on time or giving untruthful information on an application.
You only have two options if your insurer cancels your car insurance policy. You can challenge the decision and try to clear up any misunderstanding or shop for a new insurance company. If you receive a cancelation notice from your insurer, you will typically still have 10 to 30 days before the coverage ends. That buys you some time to attempt to reinstate your policy or find new coverage.
Several bad things will happen if you fail to carry car insurance for your vehicle. Not only will you likely pay higher premiums, it can adversely affect your credit score for up to seven years. In some cases, your driver's license and registration might get revoked. Additionally, you may face severe monetary penalties.
Since different states have different insurance policy cancelation rules, ask your insurance agent any questions about reinstatement requirements. In some states an insurer has the right to cancel a policy within a few months after it has been approved. The period is known as the "binding period."
If your insurer refuses to reinstate your canceled policy or allow you to apply for a new one, your only option is to find another insurer.
If you are looking forward to providing car insurance coverage, our experienced Jack Stone Insurance Agency team can help. Contact us for more information on car insurance reinstatement.
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