MICH. IS THERE A PENALTY FOR CANCELLING INSURANCE AFTER CAR IS TOTALLED?

UPDATED: Oct 14, 2020

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UPDATED: Oct 14, 2020Fact Checked

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I am a driver in the state of Mich. I was involved in an auto accident, The car was totaled. I was injured, unable to drive. I cancelled the policy, If I recover and am able to drive again will I be penalized for having cancelled the policy? Will my rates increase?”

Asked December 5, 2017

1 Answer


Insurance is something that is required if you operate an automobile. When accidents do occur there may be many questions that the driver may have regarding the accident as well as his existing insurance coverage.

First of all, if you live in Michigan and you are involved in an accident that totals the car, you should never cancel the policy especially if you are injured as a result. However, if you are injured and you do cancel the policy here are some specifics that may help you.

  • If you cancel your policy immediately following the accident, by law the insurance carrier still must pay for any costs associated with the accident as long as policy was in effect at time of accident.
  • Even if you cancelled the policy, you should still seek necessary medical treatment. If you are able to drive again after your injuries heal, "yes" you can be penalized.

Essentially, the driver would be penalized not for cancelling the policy but for being involved in an accident. Therefore, the driver would be penalized for the accident as well as the money that the insurance carrier had to pay out as a result of the accident.

Therefore, the drivers insurance rates would be higher when he starts driving again. However, in some cases if it was a first time accident the insurance company may forgive the incident and not raise the premium. Michigan can be a forgiving state, however this would be determined on an individual basis. Every case is different when it comes to an automobile accident. If you have a clean driving record with this one exception your insurance rates may not go up. However, you may have to fight the issue by writing to the insurance company or securing an accident attorney within the state of Michigan.

Answered December 8, 2017 by JohnBoy

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