What can happen if your car insurance gets cancelled?

Car insurance is now required throughout the United States, which means that having your insurance canceled could cost you a lot. First, you will have to pay a higher premium if your insurance is canceled, and how much the rates will increase depend on why your policy was terminated, how long it has been so, and all of the factors that would normally play a part in rate determination, such as your credit score, driving history, and personal demographics.

Second, if your insurance is canceled and you did not get another policy right away, you could face any of many civil penalties. Your license could be suspended, and you'd have to pay a reinstatement fee after you present proof of current coverage. Your vehicle registration could be suspended, and that means you would not be allowed to drive on any public roads. And if you are stopped while driving without insurance, there are hefty fines that could be imposed, as well as being incarcerated.

Another potential problem with having your car insurance canceled is that you may have a hard time finding a company to write you a new policy, especially if you have been convicted of driving without proper insurance or for other serious offenses. Insurance companies will categorize you as a high risk driver and because you have been stopped for driving without insurance, the risk of you doing so again is high. That means that insurance companies face a potential risk in insuring you, because you may not maintain the policy or adhere to the terms of the contract.