YOU ASK:

After how many accidents can an auto insurance company drop your coverage?

WE ANSWER:

It depends.

Here are some situations with regards to after how many accidents can cause an auto insurance company to drop your coverage:

A Suspended or Revoked License

It only takes one accident that results to a license suspension or revocation. For this case, the auto insurance company has rightful cause to drop your coverage. This would be for a really serious offense such as a DUI (Driving Under the Influence) or being involved in a hit and run.

Now, the loophole is that if the auto insurance company was not able to find out about this license revocation within a three-year period, then you're home free. They can't count that suspension or revocation as cause to cancel your policy three years down the line.

Also, the insurance company cannot cancel your policy if the revocation or suspension was for a license from another state, but you still have your driver's license with the state where the insurance company issued the policy to you. Of course, this will depend on agreements between states.

Pennsylvania, an Example

In Pennsylvania, it will take the following for the insurance company to legally cancel or refuse renewal of your policy:

  • Two at-fault accidents that happen within 3 years, where these accidents exceed the threshold of $1,150 in expenses (damage or injury)
  • A total value of 12 points in your driving record

On a more subjective note, the insurance company may look into the circumstances of the accident (such as skidding on a road covered with snow).

Notice Prior to Cancelation

Your insurance company is required by law to notify you about the cancelation. You will also be given a chance to make your appeal to the insurance company. The insurance company can't simply cancel your policy without your knowing it.

Other Reasons for Cancelation

Aside from accidents, the insurance company reserves the right to lawfully cancel your policy if you commit an act of fraud, misrepresent yourself (such as failing to notifying the insurance company of traffic violations), fail to pay your premiums or develop a medical or mental condition that will increase the risk of your driving.

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