You may cancel your insurance policy any time you want. Even if you have an open claim with your insurance provider, you can cancel or switch your coverage. However, your claim does not switch with you. Your old company continues to handle your claim until it is settled or denied.
Performing a Switch
You can switch insurers, without charge, any time you please. Your old insurer simply cancels your existing policy when you give proper notice of cancellation in accordance with the policy's terms and conditions. In states that mandate compulsory insurance for certain sectors -- auto insurance, for example -- your original insurer may require proof of coverage from your new insurer before it cancels your policy. This process is the same whether or not you have an open claim. Unless your policy specifically says otherwise, your insurance covers events that occur during the insured period even if you do not renew your policy.
The Claim Continues
If you cancel your policy or switch providers while your old claim is open, your original insurance company remains responsible for handling the claim. It cannot refuse to settle the claim simply because you no longer have a policy with the company. As long as your policy was valid at the time you lodged your claim -- that is, you paid the insurance premiums and observed the policy conditions -- the claim runs its usual course. You are still responsible for any deductibles and out-of-pocket expenses in connection with your claim, as spelled out in your policy documents.
One thing you cannot do is switch coverage because you are unhappy with the way your insurance provider is handling your claim and then submit the same claim to your new insurer. Filing the same claim with more than one insurance company constitutes fraud. At best, insurance companies will blacklist you; at worst, you'll be charged with a crime.
Finding a New Insurer
While your current insurer can't stop you from leaving, your open claim may harm your chances of finding a new insurer -- especially if you are at fault for the insurance event. Ninety-eight percent of auto and homeowner insurers log claims in the Claim Loss Underwriting Exchange, or CLUE. Any potential insurer can access your claims history from the CLUE database. An open claim, particularly one that throws up a warning flag to an insurer, may result in denial of coverage. In the context of homeowners insurance, dog bites, water damage claims and slip-and-fall claims invariably present an underwriting risk, according to Bankrate.
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