Will canceling my auto policy affect my future rates?
There are a variety of reasons why you might need to cancel your auto policy before its term officially ends. Many car owners are worried about how a cancellation will impact their ability to secure affordable car insurance in the future. Here’s what canceling a policy now will mean for you.
Canceling Your Policy Vs. Having Your Policy Canceled
First, car owners need to understand the difference between canceling their policy and having their policy canceled by their insurance provider. If you choose to cancel your policy, it is normally due to a legitimate reason. For instance, you might want to cancel because you are selling your car or moving to a new state. When it comes to these types of cancellations, auto insurers are reasonable, and they will not hold them against you. This means that this type of cancellation will not have any negative effects on your future car insurance rates.
However, if your insurer takes it upon themselves to cancel your policy, this is an entirely different situation. Your insurer will only cancel your policy if you are deemed too high-risk to insure. For instance, forced cancellations often result from missed payments, extensive filing of claims, or failure to meet policy terms. If your insurer cancels your policy, you will have a difficult time finding another company willing to insure you. When you do, expect your rates to be much higher than they were before.
Lapses in Auto Coverage
As previously mentioned, a voluntary cancellation will not have adverse effects on your future ability to secure auto insurance. However, if you cancel your policy and then wait a long time to secure a new one, issues arise. This is because having a gap in your auto insurance will cause auto insurers to flag you as high-risk. As always, high-risk translates into high insurance costs. So, if you want to protect your ability to secure affordable car insurance, make sure that you do not allow lapses in your auto coverage.
This is how canceling your auto insurance can affect your future car insurance rates. Do you have further questions regarding your auto coverage? If so, contact the expert at VGW Walker Insurance in Texas. We are ready to assist you with all your personal coverage needs today.
