You've ignored the warnings and now it's happened, your insurance has been cancelled. Here's what to do next:

• Don't panic, you won't lose your coverage instantly. By law in most states, you are entitled to a grace period between your notice of cancellation and when your coverage is actually terminated, often 60 days, but not always. In some cases, you may only get 10 days notice before termination of coverage if the reason for cancellation is nonpayment of your premium. Your cancellation letter should spell exactly out how long you have. If it doesn't, check your state's law on the subject. Don't waste too much time deciding what to do, though. You really don't want to be caught with a lapse in coverage because in most jurisdictions you can fined for even the smallest period of no coverage.

 

• Determine the reason for your cancellation. This should be spelled out in your cancellation letter, too. If not, contact your insurance company right away to find out. This is important because different reasons can have a significant effect on how difficult it will be to get new coverage. For example, if your cancellation is due to nonpayment, you may be able to have your coverage reinstated by your current insurer. You may even be reinstated at your old rate, but be prepared to make a big lump sum prepayment, possibly even a full year. If your cancellation is due to a serious violation of the law, like drunk or reckless driving, your search for new coverage will probably require a new carrier.

 

• Get new insurance. Start with trying to negotiate with your current carrier. You'll probably end up paying more for coverage, but that will likely also be true if you go with another company. If you are dropped and labeled a "high-risk" driver (typically when you cause one or more accidents or are convicted of a DUI,) you will be placed in your state's high-risk insurance pool. You will definitely pay more then, but what did you expect? And what other choice do you have?

 

• Do not drive without insurance coverage. This is very important. You can get into a heap of trouble driving without insurance, including loss of your driver's license and vehicle tags. You'll also spend a pretty penny getting them reinstated, too.

The bottom line is that you don't want things to get to a point where that cancellation letter arrives in your mail box. If it does happen though, there are remedies. Some of them are expensive and all of them a hassle, but they are available.

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