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.
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.
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