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Can you get car insurance if you owe another company?

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Here's what you need to know...
  • The auto insurance company has the right to cancel your current coverage if you do not pay your premium and a certain period of time goes by without you making up for the late payment
  • If you decide to switch auto insurance providers, do not make the mistake of failing to call your previous insurance provider and letting them know that your policy needs to be canceled
  • If you continue to receive bills from an auto insurance company that remain unpaid, this could eventually damage your credit score, especially if they decide to send your account to collections
  • Other insurance providers may not offer your coverage or will charge you a much higher amount if there is a lapse showing for your policy
  • It may be possible to get your auto insurance coverage reinstated with your current provider if you are able to quickly make payments on past due bills, but the longer you wait, the less likely you will be able to get your coverage reinstated
Maintaining current auto insurance coverage is important for anyone who plans to drive or owns a car. Failure to do so can result in serious penalties for you. If you have had your current auto insurance canceled by your provider because you have failed to make timely payments, this could reflect negatively in your credit and insurance scores. Compare car insurance rates now by using our FREE tool above!

These scores are used by other auto insurance providers to determine whether they should offer you coverage and what rate you will pay for that auto insurance coverage.

Making Payments on Your Auto Insurance Policy

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One of the most common ways that people have their car insurance coverage canceled early by the insurance company is that they do not make the necessary payments on their policy and fall too far behind. To prevent this from happening, call your auto insurance provider the second you realize that you are not able to make payments.

In general, your auto insurance company will be much more willing to work with you if you give them advance notice of payment problems. If your bill is simply too high, this is also a good time to check into discounts that may be possible for you to get your rate a bit lower. You can also look into dropping certain coverages that are not absolutely required in order to get your auto insurance rate even lower.

If you do not communicate with your auto insurance company, you are at risk for getting a cancellation notice for your policy.

While there is typically a grace period for you to catch up with payments, you do not want to waste any time in making this happen.

If your policy ends up being canceled, the auto insurance company could try to collect the remaining amounts owed by sending to your account to collections. If this happens, your credit score will take a hit. Having a good credit score is important for getting a good rate on your auto insurance policy from another insurance company.

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Getting a New Auto Insurance Provider

When you shop for new rates on auto insurance coverage, you will go through an underwriting process with the insurance company that verifies your quote. During this process, the insurance company will look into your driving record and any information on your current auto insurance policy.

Not having a current auto insurance policy when you are in the process of getting coverage can be problematic because it means that you do not follow the rules when it comes to auto insurance coverage.

In general, insurance providers frown on this because they think it makes you a higher risk as a driver. This is why you should do whatever you can to avoid a lapse in your coverage before you have to get a policy from a new auto insurance company.

Auto insurance companies all share information with each other through a reporting database so that they can get the necessary information on drivers to insure. This includes payment history of any driver who has had his or her coverage canceled because of a failure to pay the policy premiums.

While having a blemish on your insurance history is never a good thing for the rates that you will pay, it is possible to work this off through the passage of time. After a certain amount of time passes, incidents such as a policy cancellation for failure to pay policy premiums does not necessarily affect your credit score or the rate that you have to pay for auto insurance coverage.

What to Do if You Cannot Get Auto Insurance Coverage at All

No matter your situation, there is always a way to get the legally required auto insurance coverage if you own a car or plan to drive a car. The way that this works is that you will probably have to go through your state department of insurance for a high-risk pool of drivers.

The rates for coverage are much higher, but you will start establishing a good record of making regular payments and having the required coverage.

Going to a state assigned risk pool for coverage should definitely be a last resort. The rates are much higher than any traditional form of auto insurance coverage. Before you go down this route, make sure that you have thoroughly checked online for different auto insurance quotes and pursued as many potential options as possible.

When you do have to get a state assigned auto insurance policy, you should make every effort to maintain a safe driving record and not have any claims on your policy. This will help you to pay a lower rate when you are able to get a more traditional auto insurance policy. Taking steps to raise your credit score is also important for lowering your rate.

Getting Car Insurance if You Owe Another Company

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If you owe money on a bill for an auto insurance policy, then you will want to pay that amount as quickly as possible to avoid cancellation of your policy and any lapse in coverage.

Start comparing car insurance rates now by entering your zip code in our FREE tool below!

If you are thinking about switching to another insurance provider, you need to let your current auto insurance company know when the switch will take place so that you are not receiving bills for late payments. Failure to notify your auto insurance company about plans to cancel coverage could result in a big headache for you because of accounts being sent to collections and the negative effect on your credit score.

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