Question: Can my auto insurance company cancel me if had two accidents in three years? I have no tickets and no points, and I don’t see where my policy states that I can be canceled for just having accidents.
Answer: Yes, it’s possible that your policy will get canceled if you have two or more car accidents within a three-year period. However, if you are already in the middle of your car insurance policy, it’s more probable that you’ll be non-renewed at the end of your policy term.
No traffic tickets or points on your license is a positive with car insurers, but it won’t make them ignore the fact that you’ve had accidents. (See "Here's how many car accidents you'll have.")
You're sometimes penalized for tickets because they show the potential for you to be a risky driver who could cause an accident. But being in an accident shows that you are an actual risk. Multiple accidents and claims show the insurance company that they are taking on more risk and are more likely to have to pay out claims your behalf.
Insurance companies don’t want to pay out claims, so if you have enough accidents in a short enough period of time, then underwriting rules of many insurers call for you to be canceled or non-renewed.
State laws vary, but typically it’s easier for an auto insurance provider to non-renew a policy than to cancel it. A non-renewal may feel like a cancellation to you, but it is different.
The cancellation of your policy occurs during the term of your policy. State laws generally govern the reasons you can be canceled, like non-payment of premium payments, fraud or misrepresentation, or the suspension or revocation of the license of an insured driver.
In some states, during the first 60 days an insurance company has more flexibility in the reasons they can cancel you, such as if your insurer discovers you don’t meet their underwriting guidelines.
A non-renewal differs because it occurs at the end of your policy, when you’re informed that your insurer will no longer continue your policy. Non-renewals happen for various reasons; all based on your carrier’s underwriting guidelines, which are governed by state laws. Most often non-renewals are due to an insured having a driving record that has multiple at-fault accidents or motor vehicle violations.
Check with your insurance regulator why non-renewals and cancellations are allowed in your state.
If you do get canceled or non-renewed, take a minute to be angry if you want, but remember that not all car insurance companies follow the same rating rules, so it’s time to move on.
You can easily comparison shop for a new car insurance policy and buy immediately. It’s possible that you’ll find a new insurance company that will not only take you as a client, but that doesn’t rate as heavily on accidents, allowing you to pay cheaper car insurance rates and come out ahead.