Cancelling Auto Coverage Can Affect Future Rates

Most of the time, car insurance is a ‘set it and forget it’ purchase. Once you have a policy, you can schedule the payments and rest easier knowing that you will be covered for all the perils listed on your policy. Sometimes, however, it is necessary to consider cancelling your policy.

The reasons that people cancel their auto insurance are plentiful. Some cancellations are due to the covered car being sold or pulled off the road for extended maintenance, others are due to major life events such as moving, marriage, or divorce. Some people will cancel their current auto insurance policy because they are dissatisfied with their current insurance provider and want to make a change. No matter what the reason is that you are considering cancelling a current insurance policy, you shouldn’t make the decision lightly – what some people don’t realize is that cancelling your current policy could have repercussions on your future insurance premiums!

Why would it affect your future insurance payments, you ask? Well, that is simple. When you sign up for an insurance policy, you agree to pay a certain amount depending on how long you will receive coverage. The price for a six-month policy is usually more expensive per month than a twelve-month policy because you get a discount based on the extra commitment of a longer contract. This is like saving per ounce or pound at the grocery store when buying larger sizes of food items – the bigger your commitment, the less you pay per unit.

Because of this, insurance providers will sometimes look at your insurance history when deciding on your next premium amount. If they see that you have prematurely cancelled a policy in the past, they may be more likely to increase your cost – since your history reveals that you could need another early cancellation, making you a payments risk for their bottom line.

It is also worth noting that you should never drive a vehicle that is uninsured. Not only are you required to have auto insurance when driving in the state of Massachusetts, driving without insurance is a huge financial risk. Could you imagine the financial impact of causing a car accident without any kind of coverage? The costs to repair your vehicle could be very expensive, let alone fixing damage to the object you ran into (whether it is another car, a mailbox, etc). The cost of an accident also skyrockets when someone is injured, if they miss work, or if there is a lawsuit. Think about these potential costs before you get behind the wheel without any insurance!

Remember – you never think when you’re heading to work or going to run a quick errand that you will get in a major car accident, but it can happen to anyone at any time. There are estimated to be an average of 6 million car accidents in the US every year, and more than 90 people are killed in car accidents every day. In 2016 alone there were 359 fatal crashes in the state of Massachusetts. In addition to letting Vargas and Vargas Insurance make sure that you have the proper auto insurance policy to be protected on the road, make sure that you know the potential perils of driving while distracted, and don’t speed or drive while intoxicated. Driving is a privilege, and you are responsible for the safety of yourself and other drivers while you operate a vehicle.

If you are considering cancelling your auto insurance (or any of your Massachusetts insurance policies) for any reason, call Vargas and Vargas Insurance Agency and talk to an agent. They will be able to explain any and all repercussions that may arise because of a cancelled policy and can advise you on your decision, and potentially come up with an action plan that will fit your needs. Remember – one quick call to 617-298-0655 can get all your insurance questions answered, so don’t stress… talk to a Vargas and Vargas Insurance agent today.

Already cancelled an auto insurance policy and looking for a new one? Vargas and Vargas Insurance is an independent insurance agency – that means that we can search several insurance providers to find you a great policy, even if you have cancelled a policy in the past. No matter your insurance needs, we will find some way to help you and ensure that you are protected, so call 617-298-0655 today.