Can I cancel my car insurance after a claim?

Car Insurance Claim
If you were involved in an auto, motorcycle or other motor vehicle accident, you might ask “can I cancel my car insurance after a claim?” Read on to learn more about cancelling your insurance after filing a claim. Or, call our office for a free consultation at 847-305-4105, before you take any action.

Can I cancel my car insurance after a claim?

I have received calls from many motor vehicle accident victims who ask if they can cancel their insurance after filing a claim. In a word, yes, you can cancel your insurance after you file a claim. However, there are a few things to consider before you do so.

This issue often comes up involving motorcycle accidents. At the firm I worked at previously, we did a lot of motorcycle accident cases. Motorcycles that get in accidents are often completely totaled. In that case, there is little reason to keep your motorcycle insurance active after the accident on the motorcycle that was totaled – unless you are immediately going to get another bike.

Many people after they get in a motorcycle accident decide not to ride any more. As such, people often asked if they could cancel their motorcycle insurance policy without affecting their insurance claim.

Insurance at the time of the accident

Generally speaking, your motor vehicle insurance policy is going to cover your claim if the policy was in effect at the time of the accident. As such, it is irrelevant to the viability of your claim if you cancel your policy after the accident – even the day after your accident.

However, cancelling may affect your claim in unexpected ways. Insurance companies are notoriously (and some might say intentionally) difficult to deal with.

In my experience, when you file a “first party claim,” meaning a claim with your own insurance company, the insurance company will attempt to be helpful, depending on the adjuster you are dealing with.

However, as soon as you are “adverse,” meaning, you are opposing your insurance company, you are no different to them than you are to the insurance for the person who hit you.

As such, its beneficial to stay on good terms with your insurance. If you cancel your insurance right after filing a claim, you may risk becoming less of a priority to them. You are no longer a client. You are not adverse per se, but you are no longer paying insurance premiums to State Farm or any other insurer.

Other effects

If you do cancel your auto insurance, there are ramifications just in general, not necessarily related to your claim. First, your vehicle has to be covered at all times. Do not allow a “gap in coverage” on your vehicle. That could result in fees and there could be other charges when you try to restart coverage.

Also, if anything happens to your vehicle while the coverage is not in effect, of course your insurance will not cover it.

So, for example, let’s say your car gets involved in an accident and you believe the insurance company is going to total it. The car is sitting in front of your house waiting to be inspected. If you cancel your policy before a final decision is made by your insurance company, you will be stuck with the bill if anything happens to it – like a break in, or a tree falling on it etc. What if the insurance company does not total it?

There may also be ramifications from the Department of Motor Vehicles for owning a vehicle without having insurance. As stated in other articles on this website, in Illinois, all drivers are required to have a minimum of $25,000 in liability insurance on all vehicles.

On your insurance policy, it may look like this 25/50/20. This means, that you have $25,000 insurance compensate any single individual you injure; $50,000 coverage if you injure more than one person in an accident; and $20,000 if you cause property damage to another person.

In Illinois, this also means that you have 25/50 in uninsured and underinsured motorist coverage.

Recommendation

So, while the answer to the question “can I cancel my car insurance after a claim?” is yes, you may want to stop and contemplate before canceling your policy.

Normally, I would say contact a personal injury lawyer. I think that’s a good idea. However, in this situation, I think it might be better to call your insurance agent. Find out what the ramifications of cancelling the policy are. Learn your options before you act.

If you want a referral to a great auto insurance agent, feel free to reach out to me. Or, if you have any questions on this or any other legal topic, feel free to call for a free consultation at 847-305-4105

What Is Full Coverage Car Insurance In Illinois?

Car Insurance Coverage IL
What is full coverage car insurance in Illinois?

Think you have full coverage car insurance in Illinois? My name is Barry Zlotowicz and I am a Glenview personal injury attorney. If you were involved in an auto accident and thought you had “full coverage,” only to find out you did not, call us for a free consultation at 847-305-4105.

“I’ve got full coverage”

I repeatedly hear the same thing from auto accident victims when they call my office after being involved in an accident. I ask them who they have car insurance with and what the policy limits of their auto insurance policy are. They often answer the same thing – “I have full coverage.”

It’s unclear what exactly people are referring to when they say this. The meaning varies depending on the situation. But universally, people do not know how much insurance and what type of insurance they have. And they definitely don’t know how much insurance they need.

Illinois mandated insurance limits

In the state of Illinois, all drivers are required to have the state minimum in liability insurance. On your insurance policy, the minimum limits will look like this:

25/50/20

This means that if you are involved in an accident, you have $25,000 in insurance to compensate the injured party; you have $50,000 for the entire accident – in the event that more than one person was hurt; and, you have $20,000 in property damage insurance.

In addition, in Illinois, you also automatically have $25,000 in uninsured or underinsured motorist coverage in case you were involved in an accident and the other driver was uninsured.

Minimum limits do NOT equal “Full Coverage”

These are the minimum limits you need to be able to drive in Illinois. To a Glenview personal injury attorney, this does not equal full coverage. To the contrary, you are seriously underinsured.

I would highly recommend that you consider adding the following:

  • Increase your liability AND uninsured/underinsured limits to a minimum of $100,000 per accident (100/300). Though frankly, it’s not enough. If you can afford it, increase the limits to 250/500
  • Collision coverage: if you get involved in an accident, it will be much quicker to use your own insurance to get your property damage repaired
  • Comprehensive coverage: if your car gets hit by a lightning bolt or other non-vehicle related accident, comprehensive coverage will pay for the repairs to your vehicle
  • Medpay insurance: medpay or medical payments coverage is a small add-on to an auto insurance policy that covers the first $2,500 or $5,000 or even more, of your medical bills. This is a great way to pay for your co-pays or deductibles
  • Rental car coverage: does your policy cover the cost of a rental car in the event you are involved in an accident?
  • Gap insurance: if you purchase a new car, you have the option of buying gap insurance. If you get in an accident and the car is totaled, the insurance company will only compensate you for the actual value of your vehicle. This value could be much lower than what you owe on the vehicle. Gap insurance will cover the balance

Why do you need so much insurance?

It is estimated that approximately 15% of all drivers in the state of Illinois are driving on the road without auto insurance. The next time you are driving, count 10 cars around you. Chances are that more than one of them are uninsured.

If you get in an accident with an uninsured driver, you can turn to your own auto insurance policy for protection. Also, if the person who hit you has the state minimum limits of $25,000 but your medical bills and/or your injuries are worth much more than that, you can seek compensation from your underinsured motorist coverage.

Also, as I’ve discussed in other blog articles, there is an increasing amount of accidents involving Uber and other rideshare vehicles and soon we will all be driving alongside self-driving cars. As such, it’s critical to have the right amount of insurance.

When do I have to have insurance?

Another question auto accident victims ask their Glenview personal injury attorney is whether they can cancel their auto insurance after an accident. They are concerned that if they cancel their coverage, they will lose the protection they have for the injuries they suffered in an accident that occurred prior to the cancellation.

That is not the case. The insurance policy that was in effect at the time of the accident will follow you regardless of what you do after the accident and/or after the policy expires.

To the contrary, I also receive quite a few calls from people who were involved in an accident but accidentally let their insurance policy lapse by not paying their bill. Or, they are uninsured at the time of the accident but immediately after an accident, they sign up for insurance in the hope that the accident will be covered.

Unfortunately, in both of these circumstances, you will not have auto insurance coverage. You have to have a policy in effect at the moment the accident occurs. Though, if you accidentally let your policy lapse through non-payment, your policy may have a clause providing you a certain number of days to make payment to continue the policy.

If you are unsure whether you have “full coverage” and want to speak with us about what insurance you should have, and how much insurance you need, call us at 847-305-4105 for a free consultation.

Should You File A Claim With Your Auto Insurance?

Frequently, victims of auto accidents want to file a claim solely with the insurance company for the vehicle that caused the accident. Should

Auto Insurance Claim
Should you file a claim with your auto insurance

you file a claim with your auto insurance as well? Yes. To find out why read this article or contact us at 312-848-9783.

Should you file a claim with your auto insurance? 

YES. You should file a claim with your auto insurance even if the accident was not your fault. There are several reasons why filing with your insurance right after an accident is important.

Uninsured/Underinsured Motorist Protection

First, there are several clauses in your own insurance contract that might be of benefit to you. The most important being your uninsured and underinsured motorist coverage. We’ve discussed UM and UIM coverage several times on this website. And we have spoken to many groups of people about the need to have adequate amounts of UM and UIM coverage.

In Illinois, if you have auto insurance, you automatically have a minimum of $25,000 in UM/UIM coverage. It is estimated that approximately 15 percent of all drivers in Illinois are uninsured. If the driver who hit you turns out not to have insurance, you will need to have filed a claim with your own insurance or you will be unable to recover for your damages. It happens all the time.

Some people want to wait to file with their own insurance company until after they hear from the defendant’s insurance as to whether there is insurance and if they accepted “liability” or responsibility for the accident.

That is risky. Accident victims often don’t obtain the name of the driver who hit them or the name and policy number of the defendant’s auto insurance. If that’s the case, you have to wait until the police report comes out to get that information and that often takes a long time, especially if it’s the Chicago Police Department.

Some insurance policies have a time limit within which a claim has to be filed in order to utilize uninsured motorist coverage. If you miss that deadline, the insurance company could reject your claim leaving you without any recourse. We have a new client who recently delayed filing a claim with her insurance for over 60 days because she thought she could pursue the defendant’s insurance. When our client finally did file with her insurance, she was denied for filing more than 30 days after the accident. By the time she got to us it was too late.

Medical Payments coverage

Many auto policies include medical payments or “medpay” coverage. Medpay is a clause in your insurance policy that will cover you for the first $2,500 or $5,000 etc. of your medical bills. We often use it to pay our clients’ co-pays or deductibles. You will eventually have to pay your insurance company back for the medpay you use out of the proceeds of your settlement. However, you will usually get a 1/3 reduction off of whatever medpay you use which is a significant benefit to you.

We have heard some attorneys argue that medpay is a waste of money. We disagree. We’ve seen it used too many times to our clients’ benefit to dismiss it so quickly. Especially for what it costs.

In addition, your medpay is “primary”, meaning, medpay must be exhausted before your health insurance will cover your remaining medical bills.

Property Damage

If you have collision coverage, it may also benefit you to file a claim with your own insurance company. The defendant’s insurance company is not going to pay for the repairs to your vehicle until they accept responsibility for the accident. That can take a while.

If you have collision coverage on your own policy, you can get your insurance company to pay for your property damage. This gets you back in your vehicle quicker.  It also avoids the situation where you have to pay for your own tow bill and reduces the amount of storage charges you pay while your car sits at the tow yard. You have a duty to “mitigate” (reduce/diminish) those charges.

If you use your own insurance to pay for the property damage, you will likely have to pay your deductible as discussed in this article. However, you will get reimbursed for your deductible once your insurance company “subrogates” or seeks reimbursement for your property damage from the defendant’s insurance company.

Other Benefits of Filing with your Insurance

Insurance companies have access to resources and tools to research whether a defendant has insurance; they have the manpower to interview witnesses; they can pay for an appraiser to travel to where your vehicle is to inspect it, and so forth. We utilize our clients’ insurance often to assist us in pursuing claims against defendants.

Other Issues

Will my auto insurance rates go up? It is possible. Anyone who tells you 100% that your rates will not go up is not telling the truth. Insurance companies have the ability to raise your rates for no reason, let alone if you are in an accident, even if they are not your fault. But that is a topic for another article.

What if there is no other vehicle involved? If you crash your car into your garage door and it causes $750.00 to your bumper, should you file a claim with your auto insurance? That depends. If you have a $500.00 deductible, it might not be worth it. You will only save $250.00 and this will count as a mark against your insurance which could cause your rates to go up.

Duty to cooperate. If you do file a claim with your insurance company, you have a duty to cooperate with your insurance company to investigate the accident. That might mean giving your insurance company a recorded statement, facilitating an inspection of your car, or undergoing a deposition. If you refuse the above, your coverage could be denied.

Conclusion

Call us today at 312-848-9783 if you are unsure whether you should you file a claim with your auto insurance after an accident. Our consultations are always free and we will come to you if we agree that our firm can help you.