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Can You Cancel Your Car Insurance After a Car Accident?

Over the past few years, I have gotten many questions from clients on insurance related matters. One of the most common questions I typically get is “Can I cancel my insurance policy after an accident?” If you were involved in any type of motor vehicle accident in Florida, you too may be curious as to whether or not you can cancel your auto insurance policy after filing a personal injury or property damage claim. If you recently bought a new car or want to switch insurance carriers, you may request that your previous policy be cancelled. In some instances, insurers will allow you to cancel over the phone. Other insurance companies will provide you with documentation and require your signature to make your cancellation effective. Overall, it is best practice to put all of your communications with your insurer in writing.

Now let’s say that you want to cancel your policy because you were involved in an accident. If you get into an accident, understanding how insurance works after you file a claim can make all of the difference. To begin, in Florida, all drivers are required to carry a minimum of personal injury protection and property damage liability coverage on their auto insurance policy. The insurance requirements remain in place as long as the driver has a valid registration and license plate tag on their car or in their possession. If you are involved in a car accident, you need to have valid insurance coverage at the time of the loss to be able report a claim. Companies must honor claims as long as the policy was active on the date that the accident occurred. Ordinarily, your auto insurance policy is going to provide coverage if your policy was in effect at the time of the car accident. As such, it is irrelevant to the viability of your claim if you cancel your policy after the accident. In most cases, this issue becomes important when comes up when a driver’s vehicle is declared to be a total loss. If your car is totaled and you do not plan on buying a new car for some time, you have the right to cancel your policy and still obtain compensation for your damages. Obviously, it does not make any sense to continue paying insurance for a vehicle that you no longer own. Although in the aforementioned scenario it is usually suggested that you cancel your policy, that is not always the case. Many insurance experts recommend staying with the same insurance company until your claim is fully resolved. This is a good way to avoid any unnecessary delays with the handling of your claim. The point is that while you do have the right to cancel your insurance policy at any time, there may be some negative consequences that you should be aware of before doing so. Here are some of the penalties that you should be aware of before you cancel your insurance after an accident:

  • If anything happens to your car while the coverage is not in effect, your insurance company will not cover it.
  • If you cancel your insurance coverage for your totaled car before transferring the car to your insurer, you may be liable for any additional damage to your car. For instance, if your car is broken into.
  • If your car is still under your name and you decide to cancel your insurance policy, the Florida department of motor vehicles may fine you.
  • Remember, your car has to be covered at all times in Florida. Do not let there be a gap in coverage on your vehicle. That could result in fees and there could be other charges when you try to restart coverage. If you are still driving your car around after canceling your insurance policy, you can receive a citation or even have your vehicle impounded.
  • Whenever you have a lapse in insurance coverage, you may face the risk that your future insurance rates could be much higher when you try and obtain another policy.

So, what happens when you get in a car accident and your insurance determines that your car is a total loss? If you don’t plan on getting another car right away, it might be appropriate to go ahead and cancel your insurance policy or at least remove your vehicle from your policy if you will be renting a vehicle. In these situations, you probably had your vehicle inspected by an insurance adjuster and they likely advised you of your coverages. Once the adjuster provides you with a settlement for your total loss vehicle and tells you how much your insurer is going to pay for your car, you’re going to need to have the insurance company provide you with the information in writing as you may need it later on in order to cancel your policy. Once you cancel your policy, the state of Florida requires drivers to turn in their registration and license plate in order to completely cancel an auto insurance policy. If the plate was still on the car when it was towed to a salvage yard, this can make this task more difficult. For this reason, we strongly advise that you obtain your license plate and any other documents from your vehicle before having it towed by your insurance company.

Speak with a Miami Personal Injury Attorney

To conclude, while the answer to the question “can I cancel my car insurance after a car accident?” is yes, you may want to think twice before canceling your policy. If you or someone you love was injured in a car accident, you may have a right to seek compensation for your losses. The Law Offices of Suarez & Montero Car Accident Attorneys is a personal injury law firm with locations in Miami and Broward. A personal injury claim can seek funds that cover medical expenses, lost income and other damages. The car accident attorneys at Suarez & Montero can help those of you who would like to pursue a car accident claim. To discuss how we can assist you, call us or contact us online. We encourage you to learn more about and the successes our attorneys have had on behalf of individuals and families who have suffered serious personal injury in accidents involving vehicles. Call us today to schedule a free consultation. We’ll review your case and help you understand your legal options.