Car Insurance Policy Lapse: Frequently Asked Questions

Posted on: 22 June 2022

Depending upon where you live, you will have some sort of legal requirement when it comes to owning a car insurance policy. Most car dealerships require you to have vehicle insurance and, in many cases, if you are pulled over by a police officer and do not have proof of automobile insurance, you will suffer a fine. This and many other reasons are why you should never allow your automobile insurance policy to lapse. Here are the answers to a few frequently asked questions you might have about a lapse in automobile insurance.

What Exactly Is a Lapse in Automobile Insurance?

A lapse in automobile insurance simply means you do not have insurance for a period of time. This can occur for several reasons. For example, when some people switch insurance providers, there might be a short window of time when the old policy expires before your new policy takes effect. Additionally, if you neglect to pay your insurance premiums for a long amount of time, the insurance provider will eventually cancel the policy.

Additionally, your insurance provider may cancel your policy if you file several claims. A lapse can also occur without your knowledge, such as if you have the payment automatically debited from your checking account and you do not have enough funds to cover the cost.

What Happens If I Let My Automobile Insurance Lapse?

Unfortunately, depending upon the circumstances, if there is a long lapse in your car insurance policy, you might suffer some serious consequences. For example, if you are involved in an automobile accident and you are at fault, you will be liable for the costs of repairs, medical bills, and other expenses that occur because of the accident.

When you do apply for a new policy, the insurance company may consider you a risk due to the lapse, especially if you are involved in an automobile accident during the coverage lapse. This can result in higher premiums or in some cases, you might not be able to secure automobile insurance at all.

How Can I Reinstate My Automobile Insurance and Get the Best Rates?

The best way to reinstate your car insurance and get the best rates is to shop around. Talk with a variety of different automobile insurance providers until you are able to find a premium you can afford. There are some ways you can lower your premiums as well, such as bundling automobile and homeowner's insurance or taking on a higher deductible.

Because of the potential for serious financial consequences, it is critical to avoid having a lapse in your automobile insurance.

For more information, contact a car insurance provider in your area such as Mike Pierce Insurance.