Q

Can I cancel auto insurance with an open claim?

A

Yes, you can cancel your auto insurance if you have an open claim, but it may not be the best idea for most people.

Kara McGinleyAndrew Hurst

By 

Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

 & Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated  | 4 min read

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Having an open claim doesn't prevent you from canceling or switching your auto insurance policy. Though you may have to pay a cancellation fee, ending your coverage with one company and switching to another won't impact the status of your previous claim. However it might not be a good idea to cancel your coverage right after an accident.

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Making a claim will cause your rates to go up when you switch your insurance or renew your policy. This means that if you switch your insurance shortly after making a claim, you may pay more for coverage much earlier than you would if you waited until the end of your policy term.

Key Takeaways

  • You can switch your auto insurance while you have an open claim, but you will have to stay in contact with your old provider while the claim is pending.

  • Changing your insurance right after a claim will not allow you to avoid expensive premiums when you switch, and your rates will go up more quickly than if you had waited.

  • If you decide to switch your car insurance company after a claim, don’t cancel your coverage before your new policy starts.

Switching insurance companies with an open claim

You can always cancel your policy with one car insurance company and switch to another, even if you have an open claim. However, make sure not to end your existing coverage before the day your new coverage starts. Otherwise you could have a lapse in coverage.

Although you can switch insurance companies with an open claim, your claim won't transfer to your new insurance company. Instead, you will have to stay in contact with your old company while the claim processes so you're aware of any potential delays or settlements.

Depending on the type of claim you made, the time the claims process takes to complete will vary. For example, you would have to spend more time remaining in touch with your old insurance company if you have an open medical or personal injury claim open, compared to an open glass claim.

However, it's generally not a good idea to change car insurance with an open claim. The cost of car insurance for drivers with an accident on their records is 55% greater than average rates. If you cancel or switch a policy with an open claim, you will be charged those higher rates much more quickly than if you had let your policy run its course. 

→ Read more about how to make an insurance claim

Can you change your auto insurance after an accident?

You can switch car insurance companies while you have an open claim, but you can't change your auto insurance after an accident to make up for an uncovered loss. You can adjust your coverage at any time, but any changes you make won't be retroactive.

For example, say you carry a minimum-coverage policy with $25,000 of bodily injury liability coverage per person, and are responsible for injuries that result in medical bills totaling $35,000. You can raise your liability limits after the fact with future accidents in mind, but you will still have to pay the $10,000 difference from the accident yourself.

Can you renew your insurance with a pending claim?

You can renew your insurance coverage with a pending claim, too, as long as your insurer doesn't cancel your coverage because of your claim. Renewing your car insurance — or letting your policy automatically renew — while you have a pending claim is simpler than canceling or switching companies. If you renewed your coverage with an open claim, you wouldn't have to work with a different company's claims department.

If you renew your car insurance policy with an open claim, you should still expect a rate increase. However, by continuing to maintain your coverage with the same insurance provider, you could eventually become eligible for loyalty rates and other discounts to lower your premiums.

How to switch your car insurance with an open claim

If you decide to switch your car insurance while you have an open claim, you should be prepared to pay more for coverage. It may be tempting to try and cancel one policy while you have an open claim to try and avoid a higher premium, but you have to disclose the claim to your new insurer, which probably means higher rates.

While you can switch your car insurance whenever you want, doing so may come with a cancellation fee. If you have to make a claim in the middle of the lifetime of your policy and you want to transfer your coverage, a portion of your premiums you haven't used will be refunded. Depending on your old insurer, though, a small percentage of your unused premium will go toward a cancellation fee.

→ Read a detailed breakdown about switching car insurance

How to find the cheapest car insurance with a bad driving record

If you want to switch companies while you have an open claim in order to save money, the best way to lower your premiums is to compare rates and discounts from more than one insurer. Many companies are known for their affordable coverage for drivers with claims on their record. 

Policygenius has found that auto coverage from State Farm is often the best option for most people who have accidents or claims on their records, while USAA tends to offer lower rates than average to eligible drivers. However, this may not be the case for every driver. If you've had to make a claim — or have one pending — Policygenius can help you find the best rates in your area.

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Depending on the number of claims you've made, you could have trouble getting covered from a conventional insurance company. If this is the case, you may have to get a non-standard insurance policy from a car insurance company that specializes in covering high-risk drivers. 

These companies, like the General and Direct Auto Insurance, have long histories of working with drivers who may have trouble getting coverage elsewhere, but receive higher-than-numbers of complaints for their service.

→ Read about getting cheap coverage with an accident on your record

Frequently Asked Questions

When should you change your car insurance?

Most people should consider changing their insurance when it's time to renew. While you don't need to change your insurance every year, it's a good idea to consider whether you're satisfied with your insurance company's rates, customer service, and coverage options. You should also think about changing your insurance if you get a new vehicle or have to add a new driver — like a teenager — to a policy, as these changes could cause premiums to increase.

How can you lower your insurance after a claim?

Your rates won't stay high forever if you have to make a claim. The longer you remain a safe driver after a claim, the more affordable your rates will become. Some insurers also allow you to pay a fee for an accident forgiveness perk that lets you avoid higher rates after a claim. You may be able to take driving safety courses to lower your rates after a crash.

Can you have two different car insurance policies at the same time?

You can have two car insurance policies that cover one vehicle at the same time, though there are downsides and it's not generally recommended. Insurers may not allow a vehicle to be insured by two standard policies, or may require the other company to file claims. Additionally, you can't collect money from two policies for the same claim.