Compare Quotes
HomeCar Insurance ResourcesWhat happens if a policy is Cancelled due to non payment?

If your car insurance is cancelled for non-payment in Canada, the consequences and regulations surrounding this can vary based on the province you’re in. Below is a general overview of some of the possible consequences and nuances for each province. Always consult local regulations and insurance providers for detailed and up-to-date information.

  1. British Columbia (BC):
    • Insurance is provided primarily through the Insurance Corporation of British Columbia (ICBC).
    • If payment is not received by the due date, a late fee may apply.
    • Continued non-payment may result in policy cancellation, after which you will be driving without insurance, which is illegal.
    • Reinstating or obtaining new insurance after a cancellation might be more expensive.
  2. Alberta:
    • Your insurance company will likely give you a notice period after a missed payment.
    • Continued non-payment results in cancellation.
    • Driving without insurance can result in heavy fines and vehicle impoundment.
    • Getting insurance after a cancellation may cost more, and you might be classified as a high-risk driver.
  3. Saskatchewan:
    • Insurance is mainly provided through Saskatchewan Government Insurance (SGI).
    • A grace period might be provided for late payments.
    • Non-payment can result in policy cancellation and being without insurance is illegal.
    • Re-obtaining insurance might come at higher rates.
  4. Manitoba:
    • Insurance is primarily through Manitoba Public Insurance (MPI).
    • MPI may provide notices or warnings before cancelling the policy.
    • Driving without valid insurance can lead to severe penalties.
    • Future insurance premiums might increase after a cancellation.
  5. Ontario:
    • After a missed payment, insurance companies typically provide a warning or a grace period.
    • Non-payment after this grace period can lead to cancellation.
    • Driving uninsured can lead to fines, license suspension, and vehicle impoundment.
    • Re-acquiring insurance after a cancellation may result in higher premiums.
  6. Quebec:
    • If you miss a payment, you will likely receive a notice.
    • Continued non-payment will result in cancellation.
    • Driving without insurance can lead to penalties and fines.
    • It might be more costly and difficult to get insurance after a cancellation.
  7. New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador:
    • Generally, after a missed payment, insurance companies will provide a notice period.
    • If you don’t remedy the situation, your policy may be cancelled.
    • Driving without insurance in these provinces can result in hefty fines and potential license suspension.
    • Re-applying for insurance after a lapse might cost more.
  8. Yukon, Northwest Territories, and Nunavut:
    • Insurance regulations are similar to the other provinces.
    • Missed payments can lead to warnings and eventual policy cancellation.
    • Penalties for driving without insurance include fines and potential legal consequences.
    • It may be more challenging to secure insurance after a cancellation due to non-payment.

No Money

What happens if a policy is Cancelled due to non payment?

If a policy is cancelled due to non-payment, there are several potential consequences and implications for the policyholder:

  1. Coverage Termination: The most immediate consequence is that you will no longer have insurance coverage from the moment of cancellation.
  2. Legal Implications: Driving without insurance is illegal in most jurisdictions, and it exposes drivers to fines, penalties, and even potential criminal charges in some cases.
  3. Financial Liability: Without insurance, you become personally liable for any damage or injury you cause while driving. This could lead to substantial out-of-pocket expenses if you’re at fault in an accident.
  4. Reinstatement Fees: If you wish to have your policy reinstated after it’s been cancelled for non-payment, you may be required to pay all past due amounts along with a reinstatement fee.
  5. Higher Premiums in the Future: Having a policy cancelled for non-payment can lead to higher insurance premiums in the future. Insurance companies may view you as a higher risk and charge accordingly.
  6. Difficulty Finding Coverage: Some insurance companies might be hesitant to insure someone with a history of non-payment. You may find yourself limited to companies that specialize in high-risk insurance, which often comes with higher premiums.
  7. Lapse in Coverage: A gap in your insurance history can also lead to higher premiums in the future, as continuous coverage is generally seen as a positive indicator to insurers.
  8. Credit Score Impact: Some insurance companies report missed payments and policy cancellations to credit bureaus. This could potentially lower your credit score, making it harder to get loans, credit cards, or even other insurance policies.
  9. Potential for SR-22 or FR-44: In some jurisdictions, if your policy is cancelled, you might be required to file an SR-22 or FR-44 form. This is a certificate of financial responsibility verifying that you carry car insurance. It’s typically required for high-risk insurance policies.
  10. Loss of Discounts: If you had any loyalty or long-term policyholder discounts with your insurer, you might lose these if your policy is cancelled and you try to return later.
  11. Communication with Lienholders: If your vehicle is financed or leased, the lender or lessor may be notified of the insurance cancellation. They might purchase “force-placed” insurance to protect their interest in the vehicle. This insurance tends to be much more expensive, and you’ll likely be responsible for its cost.

If you find yourself facing a potential policy cancellation due to non-payment, it’s essential to communicate with your insurance company as soon as possible. They might be willing to work out a payment plan or extend the due date. If your policy has already been cancelled, shopping around and comparing rates from different providers can help you find a policy that fits your budget and needs.

Can you get insurance back after cancellation?

Yes, you can get insurance after your policy has been cancelled, but there are some considerations and challenges that you might face:

  1. Reason for Cancellation: Insurers will be interested in knowing why your previous policy was cancelled. If it was due to non-payment, they might see you as a higher risk. However, if the cancellation was due to factors like selling your vehicle or moving to a location where you didn’t need insurance, that might be viewed differently.
  2. Higher Premiums: If your policy was cancelled due to reasons like non-payment, filing too many claims, or accumulating traffic violations, you might face higher insurance premiums. A history of policy cancellations can make insurers view you as a higher risk, leading to increased rates.
  3. Limited Options: Some standard insurance companies might be hesitant to insure someone with a history of policy cancellation, especially if it was due to non-payment or high-risk behavior. As a result, you might need to approach insurers that specialize in high-risk coverage.
  4. Reinstating with the Same Insurer: Depending on the reason for cancellation and how much time has passed, your previous insurer might allow you to reinstate your policy. However, this might come with fees, and you’ll likely need to pay any past-due premiums.
  5. Coverage Gaps: A gap in your insurance history can be problematic. Continuous insurance coverage is generally seen positively by insurers, so a lapse in coverage can result in higher premiums when you seek a new policy.
  6. Application Process: When applying for a new policy after cancellation, it’s crucial to be honest about your insurance history. Failing to disclose a recent cancellation or providing false information can lead to further complications or even another cancellation.
  7. SR-22 or FR-44 Requirement: Depending on your jurisdiction and the reason for cancellation (like a DUI or multiple traffic violations), you might be required to file an SR-22 or FR-44 form when obtaining a new policy. This is a certificate of financial responsibility verifying that you carry car insurance.
  8. Shopping Around: Especially if you’re classified as high-risk after a cancellation, it’s beneficial to shop around. Compare rates, coverage options, and customer reviews to find an insurer that will offer you the best value and terms.

How Long Does Non-Payment Stay On Insurance?


In Canada, the length of time a non-payment for car insurance stays on your record can vary depending on the province and how insurance companies treat such information. However, non-payment records in general, which are tied to one’s credit report, might be influenced by the credit reporting practices in the country. Here’s a general idea for some of the provinces:

  1. British Columbia: Typically, non-payment records might remain on your record for around 3 years. However, the actual impact on your premiums and ability to obtain insurance can differ from one insurer to another.
  2. Alberta: Similar to BC, non-payment can remain on your record for approximately 3 years. The effect on insurance rates and insurability will depend on individual insurance companies.
  3. Saskatchewan: Non-payment information might stay on your record for about 3 years.
  4. Manitoba: In Manitoba, non-payment can stay on your record for around 3 years.
  5. Ontario: Ontario generally sees non-payment marks remain on an individual’s record for up to 3 years.
  6. Quebec: Like in many other provinces, non-payment can be reflected on your record for approximately 3 years.
  7. Atlantic Provinces (New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador): Generally, non-payment can stay on one’s record for about 3 years.
  8. Territories (Yukon, Northwest Territories, and Nunavut): The common duration is again approximately 3 years.

However, it’s important to understand that while a non-payment mark might remain on your record for around 3 years, the period during which it affects your insurance premiums might be different. Insurance companies might have their own internal guidelines and risk-assessment procedures.

Also, non-payment can potentially impact your credit score, as some insurance companies report to credit bureaus. Credit reporting practices in Canada generally keep payment information (like late or missed payments) on your credit report for six years. This varies slightly between the two primary credit reporting agencies in Canada: Equifax and TransUnion.

How do I fight my car insurance cancellation?


If your car insurance has been cancelled and you believe it was unjust or due to a misunderstanding, you may want to take steps to dispute the cancellation. Here are some general steps and tips to consider:

  1. Review the Cancellation Notice:
    • Understand the reason for the cancellation. Insurance can be cancelled for several reasons including non-payment, misrepresentation, or an increase in the risk you present (e.g., several traffic violations or accidents).
  2. Contact Your Insurance Company:
    • Call your insurance provider’s customer service line or your insurance agent to discuss the cancellation. It’s possible that there was an error or misunderstanding.
    • Remain calm and polite, and ask for clarifications about the reason for the cancellation.
    • If the cancellation was due to non-payment, find out if there’s a grace period or if you can make the payment immediately to prevent the cancellation.
  3. Gather Evidence:
    • If you believe there was a misunderstanding or error, gather relevant documents or evidence to support your case. For instance, if they claim non-payment but you have proof of payment, gather bank statements, transaction receipts, or electronic payment confirmations.
  4. Formal Appeal:
    • If your initial discussions don’t resolve the issue, inquire about the formal appeals process. Write a letter to your insurer detailing why you believe the cancellation was unjust and provide any supporting evidence.
    • Send the letter through registered mail or another method that provides proof of delivery.
  5. Consult with an Ombudsman or Regulatory Authority:
    • In many provinces in Canada, there are insurance ombudsman services or regulatory bodies that can assist with disputes between consumers and insurers.
    • They can offer mediation services and, while they don’t have the power to overturn an insurer’s decision, their findings can influence the insurer’s actions.
  6. Seek Legal Counsel:
    • If you believe you have a strong case and the above steps haven’t resolved the situation, you might consider seeking legal advice. An attorney specializing in insurance law can provide guidance tailored to your situation.
  7. Seek a New Insurance Policy:
    • While you’re disputing the cancellation, start shopping around for a new policy. Even if you win your dispute, it’s helpful to know your options in the market. It’s also essential to maintain continuous coverage, as a lapse can lead to higher premiums and potential legal issues if you’re driving without insurance.
  8. Review and Correct Errors:
    • If the cancellation was due to information on your record (e.g., driving record or credit report errors), work on correcting these errors. This might involve contacting credit reporting agencies or your local department of motor vehicles.
  9. Maintain Communication:
    • Stay proactive and maintain communication with your insurer during the process. Follow up on any correspondence or appeals and document all interactions.

Getting Cheap Car Insurance After Cancellation

cheap insurance

Getting affordable car insurance after a policy has been cancelled for non-payment can be a challenge since insurers may perceive you as a high-risk customer. However, there are strategies and steps you can take to find a more affordable rate:

  1. Shop Around:
    • Different insurance companies have varying criteria for assessing risk and pricing their policies. It’s always a good idea to get quotes from multiple providers to find the best rate available.
  2. Explain the Situation:
    • If there were extenuating circumstances that led to your non-payment, such as a medical emergency or temporary financial hardship, be ready to explain this to potential insurers. They might be more understanding if you had a one-time lapse rather than a history of payment issues.
  3. Consider a Higher Deductible:
    • Choosing a higher deductible can reduce your premium. Just ensure you have enough saved to cover the deductible in case of a claim.
  4. Bundle Your Insurance:
    • If you have other insurance needs, such as homeowners or renters insurance, consider bundling them with the same company. Many insurers offer discounts for bundled policies.
  5. Take a Defensive Driving Course:
    • Some insurers offer discounts if you complete a defensive driving course, which can also help offset the higher premiums associated with a cancelled policy.
  6. Maintain a Clean Driving Record:
    • Avoiding accidents and traffic violations can help lower your risk profile over time, leading to more affordable premiums.
  7. Check for Discounts:
    • Many insurers offer various discounts, such as multi-car discounts, good student discounts, or discounts for safety features in your vehicle. Ask potential insurers about available discounts and if you qualify.
  8. Re-Evaluate Your Coverage:
    • If your vehicle is older, you might consider dropping comprehensive or collision coverage, especially if the car’s value is low. Always weigh the costs and benefits, and ensure you still meet any coverage requirements if your car is financed.
  9. Pay in Full or Set Up Auto-Pay:
    • If possible, pay your premium in full rather than in monthly installments. Some companies offer discounts for this. Alternatively, setting up automatic payments can ensure you don’t miss any future payments and might also come with a small discount.
  10. Rebuild Your Credit:
  • If your non-payment affected your credit score, work on rebuilding your credit. A better credit score can lead to better insurance rates with some companies.
  1. Consider Usage-Based or Pay-Per-Mile Insurance:
  • Some insurers offer policies where your premium is based on how much you drive or your driving habits, which might be cheaper if you’re a low-mileage or safe driver.
  1. Seek High-Risk or Non-Standard Insurers:
  • If standard insurers are giving you prohibitively high quotes, consider companies that specialize in insuring high-risk drivers. Just be aware that while they might be more willing to insure you, their rates can be higher.



1. Why was my car insurance cancelled for non-payment?

  • Answer: If you missed a premium payment by the due date and didn’t pay during the grace period (if one is offered), your insurance company has the right to cancel your policy due to non-payment.

2. How long do I have to pay before my insurance is cancelled?

  • Answer: This varies by insurance company and jurisdiction. While some insurers might offer a grace period of a few days to a couple of weeks after the due date, others might cancel immediately upon a missed payment. Check your policy or consult with your insurer for specifics.

3. Will I get a warning before my insurance is cancelled?

  • Answer: Typically, insurers will send a notice of impending cancellation due to non-payment, giving you a chance to settle the due amount before the policy is cancelled.

4. Can I reinstate my policy after it’s been cancelled?

  • Answer: Many insurers will allow reinstatement after a policy has been cancelled for non-payment, but you’ll likely need to pay the past-due amount along with any associated fees. However, there’s no guarantee, and procedures vary by company.

5. How will a cancellation for non-payment affect my future insurance rates?

  • Answer: A cancellation due to non-payment can lead to higher premiums in the future as you may be seen as a higher risk to insurers.

6. How long does a non-payment cancellation stay on my record?

  • Answer: Typically, a non-payment mark can remain on your insurance record for about 3 years, though the exact duration varies by jurisdiction and company.

7. Can I switch to another insurer after a cancellation for non-payment?

  • Answer: Yes, you can, but the new insurer will likely ask about your insurance history. A recent cancellation for non-payment can lead to higher rates or even denial of coverage from some companies.

8. Is driving with cancelled insurance illegal?

  • Answer: Yes, driving without valid insurance is illegal in most jurisdictions and can result in significant fines, penalties, and even legal repercussions.

9. Can I get a refund if my policy is cancelled for non-payment?

  • Answer: If you paid premiums ahead of time, you might be entitled to a pro-rated refund, minus any fees or past-due amounts. However, if you were paying monthly and missed a payment, a refund is unlikely.

10. Will my lender or leasing company be notified if my insurance is cancelled?

  • Answer: Yes, if you have a loan or lease on your vehicle, the lienholder or lessor will typically be notified of changes to your insurance status, including cancellations.

11. Can I appeal an insurance cancellation for non-payment?

  • Answer: You can contact your insurance company to discuss the cancellation and potentially appeal it, especially if there were extenuating circumstances or errors. However, the insurer’s terms and conditions typically give them the right to cancel for non-payment.

12. Will a cancellation for non-payment affect my credit score?

  • Answer: Some insurance companies may report non-payment to credit bureaus, which can negatively impact your credit score. Always check the policies of your insurer regarding credit reporting.

13. How can I prevent future cancellations due to non-payment?

  • Answer: Set up automatic payments, frequently review your bank accounts to ensure sufficient funds, or set reminders for payment due dates. Regular communication with your insurer can also help address any potential issues early.

14. Can I change my payment plan after a cancellation for non-payment?

  • Answer: Some insurers might allow you to switch to a different payment plan (e.g., from monthly to quarterly) after reinstating your policy. Discuss available options with your insurer.

15. Will one missed payment result in a cancellation?

  • Answer: It depends on the insurer. While some may provide a grace period after a missed payment, others might initiate a cancellation more swiftly. Always refer to your policy details or consult with your insurer.

16. Can I switch to a cheaper coverage option after a cancellation?

  • Answer: Yes, when reinstating or getting a new policy, you can explore cheaper coverage options, like reducing coverage limits or increasing deductibles, but ensure the coverage meets your needs and any legal requirements.

17. How soon can I get a new insurance policy after a cancellation?

  • Answer: You can typically get a new policy immediately after a cancellation, but the rates may be higher, and you’ll need to disclose the recent cancellation to potential insurers.

18. Does a non-payment cancellation mean I can’t get insurance from that company again?

  • Answer: Not necessarily. Some insurers might allow you to reapply after a certain period or after you’ve addressed the payment issues. However, expect potentially higher premiums or stricter payment terms.

19. Are there insurers that specialize in high-risk drivers or those with cancellations?

  • Answer: Yes, there are non-standard or high-risk insurers that cater to drivers with spotty records, including those with cancellations for non-payment. Rates might be higher, but they can provide a solution for those struggling to find coverage.

20. Should I inform my new insurer about my previous cancellation?

  • Answer: Always be truthful when applying for insurance. Failure to disclose relevant information, like a past cancellation, can lead to denied claims or further cancellations if discovered later.

About the Author: Valerie D. Hahn

Valerie is an insurance editor, journalist, and business professional at RateLab. She has more than 15 years of experience in personal financial products. She strives to educate readers and ensure that they are properly protected.

Leave A Comment

Continue Reading