Can You Reinstate a Canceled Car Insurance Policy?

If your insurer has canceled your policy, your next move depends on whether or not your coverage has lapsed.

Miranda Marquit
Miranda Marquit Insurance Writer
  • Co-hosts the Money Talks News podcast

  • MBA from Utah State University

Miranda is a financial writer and avid podcaster with nearly two decades of experience contributing to major outlets, including Forbes, The Hill, and NPR.

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Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Updated May 23, 2024

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Nearly every state requires drivers to have at least a minimum amount of liability car insurance. So, if your insurer cancels your coverage for any reason, you’ll need to fix the problem quickly.

A canceled policy means your auto insurance company has revoked your coverage before the end of your policy period.[1] In general, insurance companies only cancel your insurance due to license revocation, non-payment of your premiums, or the use of fraudulent information on your auto insurance policy application.

The path to reinstating a canceled car insurance policy depends on whether your coverage has lapsed or not, but it’s important to always keep your car insurance policy in effect to stay in compliance with state law.

Here’s what you need to know about reinstating an auto policy if your coverage hasn’t lapsed.

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*Quotes generated for Insurify users within the last 10 days. Last updated on May 23, 2024

Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from May 23, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

What to do if your car insurance was canceled

If your insurance company has canceled your auto insurance coverage, the good news is it’s possible to have your policy reinstated in many cases. And you’ll probably have time to do it, too, since the law requires insurers to send you notice of the cancellation. This usually comes in the mail.

Here’s the process to follow as you work through getting your auto policy back.

1. Contact your insurance company

It’s important to explain your situation and discuss your options with your insurer. You might be able to set up an appointment by email or connect by phone. Check your insurer’s website for ways to connect and share your circumstances.

Your insurance company may offer a grace period that allows you to work with the insurer toward policy reinstatement. Pay attention to the notice you receive, and contact your insurer as quickly as possible to see if you can work out an option to return your account to good standing.

When contacting your insurance company, you should have the following information available:

  • Your name and birth date. You might also need to have your Social Security number or driver’s license number available for identification purposes.

  • The policy number.

  • The vehicle identification number (VIN) of the car covered by the policy. You might also need your car’s license plate number.

During this conversation, you should also try to get more information about the canceled auto insurance, including whether it was for not paying insurance premiums or for another reason.

2. Pay outstanding balances

Once you’ve missed enough payments, car insurance cancellation laws usually allow the company to end your coverage before the end of the policy term.

If you talk to your insurer, you might get your car insurance reinstated by simply making the outstanding payments. However, you should also be ready for late fees associated with car insurance cancellation. Realize, too, that you might lose an insurance discount and be subject to higher rates after your policy reactivation.

Can Your Car Insurance Company Drop You?  What to Know About Cancellation

Can Your Car Insurance Company Drop You? What to Know About Cancellation

3. Fulfill any waiting period requirements

In some cases, the specific reason for your cancellation might be due to a license suspension or having the wrong information on your insurance application. Your notice of cancellation might note this, and your insurer may tell you there is a waiting period for reinstatement.

Many insurers require documentation that you’ve resolved the issue. For example, you might need to provide documentation that you completed a traffic class to get your driver’s license back. If the information on your application is wrong, you might need to provide documentation to back up your answers on your new application.

The insurer will then decide if they want you as a customer or if you pose too much of a risk going forward. Be aware that you might face increased rates as a result of reinstatement.

4. Reinstate your canceled policy

Once you meet the requirements set by your insurer and you’ve been through a 30-day grace period, you can reinstate your policy. Make sure you understand the rules for doing so, however, since they’re different from company to company and laws vary by state.

Your insurer may be able to help you, but it might make sense to get legal advice from an attorney, depending on the nature of the cancellation.

As you work to reinstate your policy, this can also be a good time to reassess your coverage needs and adjust your policy if necessary. Consider your car insurance premium and what might make sense. You might need to increase coverage, adjust your deductible, or take other steps to make sure you get the protection you need at a price that fits your budget.

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What to do if your car insurance lapses

You normally have a grace period before car insurance cancellation. It’s important to work to get your policy reinstated or to apply for new insurance as quickly as possible during this grace period, as a lapse in car insurance can result in higher prices the next time you try to get coverage. Additionally, your lapse in coverage will be on your record, and a long lapse will be concerning to insurers.

If your car insurance lapses, try to get a new policy as soon as possible. Compare different companies, and look for one that offers good customer service and might deal with someone who’s had trouble with insurance in the past. Just because a previous insurance company canceled your insurance and it resulted in a lapse doesn’t mean you won’t be able to get coverage going forward. You just might have to work with a different company that charges higher rates.

Common reasons your car insurance may be canceled

It’s important to note that cancellation is different from non-renewal. A company might decide not to renew your policy at the end of its period due to you having a serious car accident or too many past claims.

A company will only order cancellation of your policy for the following reasons:

  • Non-payment of premiums: If you miss payments, the company can cancel your policy. It usually gives you a grace period to catch up and pay penalties and fees, as well as your outstanding premiums. But if you fail to do this, you could face policy cancellation.

  • Driver’s license suspension or revocation: If you’re no longer allowed to drive on public roads due to state law, your insurer could cancel your policy.

  • Fraudulent information on your application: A company can cancel your policy if you, as the registered owner, have knowingly supplied wrong information on your application. If this information was placed here fraudulently, it’ll be hard to get your policy reinstated. But if the information was placed in error, you might be able to correct it with a new policy application.

Compare Car Insurance Rates All in One Place (May 2024)

Compare Car Insurance Rates All in One Place (May 2024)

Reinstating a canceled car insurance policy FAQs

Once you know the factors involved in your cancellation, you can work with your insurance company to potentially have your policy reinstated. Here are some answers to questions you might have about how to get your policy back.

  • When can an insurance policy be reinstated?

    If you meet the requirements in the appropriate time frame, you might be able to have your policy reinstated. This includes taking classes if insurers consider you a high-risk driver or making premium payments if you’ve fallen behind.

  • Are there any fees or penalties associated with reinstating a canceled policy?

    Depending on the insurance company and its rules, as well as state laws, you might have to pay late fees and penalties in addition to catching up on any missed payments. Make sure you understand the full cost of reinstatement as you go through the process.

  • What happens if you pay your car insurance late?

    If you make late payments, your car insurer might decide to cancel your policy. It can also add late fees. Another possibility is that your insurer might increase your car insurance premium at time of policy renewal. You may also lose discounts or face some other penalty for late payments.

  • What if your insurance company won’t reinstate your policy?

    Since most states require car insurance, you’ll need to try to find a new policy. Normally, there’s a grace period before your coverage lapses. Do your best to find a new insurance company willing to cover you, even if it means higher rates for a few months.

Sources

  1. Insurance Information Institute. "What's the difference between auto policy cancellation and nonrenewal?."
Miranda Marquit
Miranda Marquit Insurance Writer

Miranda Marquit, MBA, is a freelance financial writer covering various markets and topics since 2006. She has contributed to numerous media outlets, including Forbes, TIME, The Hill, NPR, HuffPost, Yahoo! Money, and more. Her work has been syndicated by MSN Money, Marketwatch, Credit.com, and other publications. She has written about insurance topics for Clearsurance, HealthCare.com, and various other websites. She is also an avid podcaster and co-hosts the Money Talks News podcast. Miranda has a Master’s Degree in Journalism from Syracuse University. Connect with her on LinkedIn.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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