Can Insurance Companies Find Out If You’ve Had a Policy Canceled?
Last Updated on April 13, 2020
If an insurer has previously canceled your insurance policy, then it could make it difficult to get car insurance in the future. But can insurance companies find out if you’ve had a policy canceled?
Today, we’re explaining whether insurance companies can find your previous insurance history, including how insurance companies share information.
Yes, Insurance Companies Can Find Out If You’ve Had a Policy Canceled
Yes, your insurance company will find out if your previous insurance policy has been canceled. This information is contained in your CLUE report.
When you apply for car insurance, your insurer will check your CLUE report.
The Comprehensive Loss Underwriting Exchange (CLUE) report is created by a consumer reporting agency called LexisNexis. LexisNexis tracks data for drivers across the country.
Some of the data included in your CLUE report includes your accident history and claims history. It also includes your list of insurers, the dates your insurance has been active, and whether your insurance is active or canceled.
A CLUE report goes back seven years and will include all claims information for the last seven years. If your insurance policy was canceled more than seven years ago, then this cancellation may not appear on your CLUE report.
Why Would an Insurance Company Cancel Your Policy?
Generally, it’s in an insurer’s best interest to keep you as a client. However, there are certain situations where an insurer may cancel your policy, including:
- Too many claims, at-fault accidents, DUIs, or other incidents within a certain period of time
- Non-payment
- Fraud
Some insurers are strict with policies. They may cancel your policy after you miss your payment by just a few days, for example, or after a single DUI.
An Insurance Lapse After Cancellation Can Raise Future Premiums
If your insurer cancels your policy, then your car insurance has lapsed. You no longer have car insurance coverage.
Insurance companies prefer drivers who have maintained continuous coverage, and having lapsed coverage is a red flag.
When your insurance lapses because of a cancellation, you have two red flags on your CLUE report: your cancellation and the lapse.
Verify your Cancellation is Final
Some insurance companies may not permanently cancel your insurance policy. If you have missed a payment by a few days, for example, then you may be able to make a payment and reactivate your car insurance.
In fact, most insurers give you 10 to 20 days after cancellation to make a payment and renew your policy. Specific time limits vary between states and insurers.
Generally, however, canceling a car insurance policy is a serious step. In most cases (outside of missed or late payments), cancellation is final, and you will need to look for another insurer.
How to Find Good Car Insurance After a Previous Cancellation
Has your insurance been previously canceled? If so, then it’s in your best interest to find new car insurance as quickly as possible.
Fortunately, there should be plenty of insurance companies willing to accept you as a client. Yes, certain reasons for cancellation can make you a high-risk client. However, you may still be able to get car insurance without much issue – especially if your cancellation was related to a minor issue like a late payment.
Enter your ZIP code and compare quotes online today.
What Happens If I Can’t Find Car Insurance After Cancellation?
If your car insurance was canceled because of too many at-fault accidents, DUIs, moving violations, or other serious incidents, then you are a high-risk driver. You may struggle to find a car insurance company willing to accept you after cancellation.
Similarly, if you were caught committing insurance fraud, then insurance companies may also refuse to insure you.
There are certain insurance companies that specialize in insuring high-risk drivers by providing the most basic liability insurance possible. Companies like The General, for example, let you legally drive while maintaining basic liability coverage at the lowest possible cost.
However, if no car insurance company wants to insure you, then there is one final option: your state’s assigned risk plan. Each state has an assigned risk pool that can help you find the coverage you need. Insurers are legally required to join the assigned risk pool and provide car insurance to certain clients. You’ll pay a high price for car insurance, but at least you can legally drive.
Does a Canceled Car Insurance Policy Raise Future Insurance Rates?
Having a canceled insurance policy on your record may raise future insurance rates.
A cancellation will certainly raise insurance rates if it’s related to a DUI, at-fault accident, fraud, moving violation, or other serious incidents. If you had multiple at-fault accidents in a short period of time, for example, then you are likely considered a high-risk driver.
Similarly, if you let your car insurance lapse after cancellation, then this can also be a red flag. Lapses generally cause car insurance rates to rise.
However, a cancellation may not have a significant impact on car insurance premiums if it was for something less serious – like a missed payment.
Final Word
Yes, car insurance companies can see when a previous insurance policy was canceled. It’s on your CLUE report and it may appear on your driving record.
Even if a previous policy was canceled, however, you may still be able to find affordable car insurance. Compare rates online today and find the best car insurance regardless of your cancellation status.
