Auto Insurance Companies That Report to the DMV When They Cancel a Customer’s Policy
Auto insurance companies that report to the DMV when they cancel a customer's policy are standard. Insurance cancellation laws by state require providers to report any policy changes to the local DMV within 30 days and to alert drivers of policy cancellation as soon as possible. Most states also require a 10-20 day auto insurance grace period after termination to allow drivers to find new coverage.
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UPDATED: Oct 20, 2021
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- State laws require every auto insurance company to report to the DMV when they cancel, change, or start a customer’s policy
- Insurance cancellation laws vary by state, but companies usually have 30 days to report a cancelled policy to the DMV
- If your car insurance policy was cancelled, start shopping for new coverage immediately to avoid a lapse in coverage
Auto insurance companies that report to the DMV when they cancel a customer’s policy are expected in this industry. State insurance laws require all insurance companies to alert the DMV when they start a new policy or cancel an existing one.
Insurance cancellation laws by state will vary but, in general, auto insurance companies have 30 days to report a cancelled policy to the state department of motor vehicles.
The good news is that state laws prohibit insurance companies from cancelling your policy for no reason and without warning. Keep reading to learn more about auto insurance cancellation laws and what to do if your auto insurance policy is cancelled.
Was your car insurance cancelled? It’s unlikely that you’ll find coverage from auto insurance companies that don’t report to the DMV when they cancel a customer’s policy, but you can enter your ZIP code above to start comparing auto insurance rates from local companies near you for free.
Why do auto insurance companies report to the DMV when they cancel a policy?
It is illegal to drive without insurance in every state except New Hampshire and Virginia. Even then, drivers in these states must prove they can afford to pay for a car accident out of pocket if they refuse to carry the mandated levels of liability coverage.
Because liability auto insurance is required in most states, state laws require all auto insurance companies to submit coverage details to the DMV.
This information is stored in an electronic database and cross-referenced with your vehicle’s registration.
When you cancel or change your policy, this information is updated by your insurance company. This way, when drivers are involved in accidents or traffic violations, it is easy to determine whether or not they are carrying the right level of coverage.
If you or the car insurance company cancels your policy, the provider has around 30 days to report these changes to the DMV and update the database.
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What happens when an auto insurance company cancels my policy?
Auto insurance companies that report to the DMV when they cancel a customer’s policy can cancel said policy at any time. However, state insurance laws protect drivers from losing coverage unknowingly.
You will never not know your policy has been cancelled, and your policy cannot be cancelled for no reason.
For example, a provider cannot deny or cancel coverage due to your driving record without first telling you why it is denying you coverage. Even if you miss your insurance payments, your provider must notify you that your policy will be cancelled due to non-payment.
If you’ve received notice from your auto insurance company that your policy will be cancelled, you will have 10 to 20 days to find new coverage.
This auto insurance grace period after termination can vary by state, but you will have at least 10 days to buy a new policy.
Call your provider after you receive your cancellation notice. If you missed a monthly payment, you may be able to have your coverage reinstated after paying the outstanding bill, but it will be harder to reinstate coverage if you lied on your insurance application or filed a false claim.
Shop around for new coverage immediately after you receive a cancellation notice to avoid a lapse in coverage.
If you need coverage quickly, consider shopping for coverage from auto insurance companies that will start policies on the weekends as a lapse in coverage can raise your rates with a new insurance company.
Can I cancel my own auto insurance policy?
Yes, drivers are at liberty to cancel a personal car insurance policy at any time and without notice. Depending on your provider you may not even have to pay a cancellation fee.
For example, GEICO allows drivers to cancel coverage at any time and will prorate prepaid premiums if you paid in full instead of month-to-month.
Other insurance providers can charge an early-cancellation fee which is why many drivers wait to cancel during the renewal period.
If you need to buy auto insurance after a policy cancellation, use our free comparison tool below to start comparing auto insurance companies in your neighborhood. Enter your ZIP code now to get free auto insurance quotes.