How Many Accidents Before Insurance Drops You?
Last Updated on October 16, 2020
So you’ve been in a few accidents. You may be wondering: how many accidents does it take before car insurance companies start to get annoyed? Will car insurance companies eventually drop you if you have too many accidents?
Today, we’re explaining how many accidents you can get into before car insurance companies consider dropping your coverage.
It’s Highly Unlikely for Insurance Companies to Cancel Coverage for Multiple Claims
First, let’s make one thing clear: it’s highly unlikely for an insurance company to cancel your car insurance coverage due to multiple claims.
Instead, most car insurance companies will simply refuse to renew your car insurance coverage. They won’t cancel it immediately. However, when your car insurance is scheduled to be renewed, then your car insurance company might refuse to renew.
Typically, car insurance policies are renewed every 6 or 12 months.
Insurers Canceling a Car Insurance Policy
As mentioned above, insurers canceling a car insurance policy is rare. Cancelation refers to the termination of your car insurance before the end of your policy period.
If your car insurance company is going to cancel your policy, it typically does so in the first 60 days of the policy period. In fact, insurance companies are required by law to notify drivers that their policy is going to be canceled and the reason for the cancellation. This is known as a notice of cancellation. It is required by law, in most states, to be sent out at least 30 days before the policy is canceled. This gives the policyholder enough time to appeal the cancellation.
One of the most common reasons to cancel a car insurance policy is for misrepresentation. Your car insurance might be canceled within the first 60 days of your policy because you lied on your car insurance application, for example. Your car insurance company doesn’t discover this lie until completing the discovery process. Once they discover your misrepresentation, your car insurance policy will be canceled.
Car insurance companies may also cancel your policy for filing a fraudulent claim. If you claim your car was stolen, for example, when you really sold it to a black market chop shop, then your car insurance company may cancel your policy.
Ultimately, if you have lied on your car insurance application or committed insurance fraud, then it’s very likely that your car insurance company will cancel your policy. However, it’s unlikely for a car insurance company to cancel your policy due to multiple at-fault claims.
Common Reasons for Cancelation Include:
- You didn’t pay your car insurance bill
- Your license or registration was suspended or revoked
- Your vehicle is unregistered
- You lied on your car insurance application
- You submitted a fraudulent auto insurance claim
Failing to Renew a Car Insurance Policy
If you have multiple claims, incidents, or offenses on your driving record, then your car insurance company might refuse to renew your car insurance policy. This is called a non-renewal. The car insurance company drops your coverage at the end of your current policy period.
Common Reasons for Non-Renewal Are:
- You have too many at-fault insurance claims
- You have too many tickets or moving violations
- You received a DUI or DWI
- You bought a new car that is too risky to insure
- You moved to an area outside of their coverage zone
Insurance companies are forbidden from dropping drivers for certain reasons. In most cases, for example, an insurance company cannot drop your policy due to age, race, gender, color, marital status, disability, or occupation. If an insurance company drops your policy for any of these reasons, then it could be seen as discrimination.
How Many Incidents Before My Car Insurance Company Drops Me?
There’s no specific number of at-fault incidents required before a car insurance company drops you.
Some car insurance companies might refuse to renew your policy after two DUIs, for example. Others might cancel your policy after 4 or 5 DUIs. Some might never cancel your policy: they might just charge higher rates.
Generally, if you have a history of risky driving behavior, then your chances of non-renewal increase substantially.
If you have multiple speeding tickets, DUI convictions, reckless driving violations, and similar incidents, then your insurance company might label you as a high-risk driver and refuse to renew your policy.
On the other hand, if you have been involved in three minor at-fault collisions over the past year, then it’s highly unlikely for a car insurance company to cancel or fail to renew your policy. Instead, the insurance company will just raise your rates.
Insurance companies vary widely in terms of how they handle cancelations and non-renewals. Some insurance companies enjoy having high-risk drivers in their pool because their high premiums balance out the pool. Other insurance companies specialize exclusively in insuring low-risk drivers.
SR-22 Forms Might Be Required
As previously stated, insurance companies will cancel your coverage if your license has been suspended or revoked. If you lose your driving privileges, chances are you will have a hard time finding an insurance company to insure your vehicle.
Many states require drivers who have had their licenses suspended file an SR-22 form, or something similar, to reinstate their driving privileges. An SR-22 is a statement of responsibility form that insurance companies use to confirm the driver has the required insurance.
SR-22 forms are required for high-risk drivers. If you were convicted of a DUI, got into an accident without insurance, or had one too many at-fault accidents, you might be required to submit an SR-22 form with your state’s department of motor vehicles. Because SR-22’s are associated with high-risk drivers, insurance companies charge high premiums to insure drivers that need the SR-22 form.
Conclusion – Can Car Insurance Drop You for Too Many Accidents?
Ultimately, it’s in an insurance company’s best interests to keep clients – not drop them.
If you have been in multiple at-fault incidents, then it’s unlikely for your car insurance policy to be canceled; instead, your car insurance company might simply refuse to renew your policy. Or, in most cases, your insurer will simply raise your rates.