Yes, you can technically cancel your car insurance at any time, including after an accident. However, doing so is generally a very poor financial decision that can lead to significant long-term consequences. The immediate reason to avoid cancellation is that your insurer will stop processing the claim for the accident. If you are at fault, this leaves you personally responsible for all repair costs, both for your vehicle and the other driver's, as well as any medical bills. Furthermore, a lapse in coverage will be flagged by future insurers, leading to much higher premiums for years.
A key factor is timing. Most policies require you to pay the premium for the entire period in which the accident occurred. If you cancel mid-term, you might receive a partial refund for the unused portion, but only if the claim is not yet settled. Once a claim is filed, the insurer will deduct the deductible and any owed premiums from that refund, often leaving you with little to nothing.
The smarter approach is to keep your policy active until the claim is fully settled and closed. After that, you are free to shop for new rates. The table below illustrates how an at-fault accident typically impacts premiums over time, showing why maintaining continuous coverage is crucial.
| Insurance Provider | Average Rate Increase After At-Fault Accident | How Long Increase Lasts | Best Action Post-Claim |
|---|
| National Average | 45-50% | 3-5 years | Shop around at renewal |
| Provider A | 42% | 3 years | Consider accident forgiveness |
| Provider B | 55% | 5 years | Look for safe driver discounts |
| Provider C | 48% | 3-5 years | Increase deductible to lower premium |
| Provider D | 60%+ (High-Risk) | 5+ years | Defensive driving course |
Ultimately, the system is designed to penalize lapses in coverage heavily. Canceling after an accident signals to the next insurer that you are a high-risk driver, compounding the initial accident penalty. Your best strategy is to see the current claim through and then compare quotes from other companies at your next renewal period.
