An auto insurance policy helps protect you from unforeseen circumstances such as accidents, theft, disasters, or damages you unintentionally cause to other people’s property. If an incident occurs and the event has already been insured, you can file a claim, and your insurer will cover the damages. However, many people wonder if it is possible for an insurance company to drop coverage because of too many claims. In this article, we’ll explain how that works and what can happen if you file too many auto insurance claims.
Understanding Multiple Claims
If you file 2 or more auto insurance claims within three years, your insurers will count these claims as multiple claims. If you have a policy that is set up with a deductible on comprehensive coverage, you may have to pay two deductibles for two separate incidents. In most cases, if your vehicle gets damaged at two different periods by separate causes, the full deductible will apply to each event.
However, in some cases, the insurer might be willing to charge a single deductible for damages that result from one incident, such as a storm. Apart from the frequency of your claims, the type of claims you file and the type of damage can also affect your coverage. If you file multiple claims for which you were at fault within three years, the insurer may decide to issue a non-renewal.
In most states, the claims you file against another party are not considered as multiple claims by your own insurer since they are filed against the at-fault party’s policy. Most preferred carriers have a surcharge for multiple claims within a three-year period. For comprehensive claims, multiple claims may not affect your insurance rate unless you file more than three claims in three years. Some insurers charge for all comprehensive claims, while some do not.
Cancellation and Non-renewal of Policies
Based on certain events, an insurer may decide to cancel your coverage or choose not to renew after the end of your policy period. A cancellation usually occurs within the first 60 days. This is when the insurer stops your policy before the end of the policy period. The most likely reasons for cancellation include supplying wrong information during the application, not paying premiums, or making fraudulent claims.
Filing multiple claims cannot result in a cancellation of your policy as long as the claims are valid. However, insurance companies may choose to not renew your policy after the policy period for certain reasons. For example, filing too many claims or other non-discriminatory reasons may result in a non-renewal.
Policyholders with a bad driving record or DUI or DWI convictions are considered greater risks and may face a non-renewal at the end of their policy. If you are also involved in too many at-fault accidents within a three-year period, your coverage may be dropped at the end of your policy. If you file too many claims that are above what you pay to the insurance company, it may result in a non-renewal. Generally, filing multiple claims within a three-year period can result in non-renewal.
Contact our agents at Massive Insurance and Financial Services today to find out how we can help you to get the best auto insurance coverage.