How Canceling Car Coverage Can Affect Your Future Rates

08 Nov How Canceling Car Coverage Can Affect Your Future Rates

A gap in car insurance coverage could afford you steeper rates.  

Are you thinking of canceling your car insurance? Whether you’re selling your vehicle to take public transport or you’re taking your vehicle off the road to restore the engine, it’s a good idea to consider these next steps carefully. There are many good reasons to cancel coverage, but it’s wise to keep coverage if you’re going to be driving or if you’re going to have a car (even if it’s off the road). 

If you choose to cancel coverage, let your insurer know as soon as possible. If you need to break away early from your coverage, you may have a penalty fee to face. You may go without car insurance for months or even years. When you look into getting car insurance for your next vehicle down the line, insurers will see that you’ve had a significant gap in coverage. This could mean that you face higher premiums because you have had a lapse in cover. To avoid this, ask a friend or family member to add yourself to their insurance (it is usually a small increase in their premium) so that you sustain continuous coverage.

If your car insurance is canceled by the insurer, it will likely haunt your insurance future. Cancellation is a red flag for insurance companies looking at prospective clients. When an insurer views your claims history, your cancellation will pop up. Insurers will then label you as a high-risk driver and steeper premiums will ensue. Insurers can cancel coverage for a variety of reasons, but they are usually justified. If you lie on your application or keep missing payments, the insurer can give you the boot.

Whatever your situation, talk to your insurer before canceling. At Dougherty Insurance, we help motorists stay safe on the roads with reliable car coverage. Contact us today for unparalleled auto insurance in Illinois, Wisconsin, and Indiana.