Why You Should Never Allow An Auto Insurance Policy Lapse
Paying your auto insurance bill on time can be easy to forget, but the consequences of letting your auto insurance policy lapse are not worth the oversight. Learn the three most important reasons to avoid a car insurance policy lapse and how to prevent this potentially expensive mistake.
#1: No coverage if you're in an accident.
If you are involved in an accident and have let your car insurance policy lapse, you will not be able to file a claim. Regardless of who is at fault for causing the accident, you may be responsible for repairing or replacing your vehicle. If you cause the accident, you may be held liable for paying the other driver's vehicle repair bills and medical bills if the other driver and/or passengers are injured.
#2: Harder to get approved for insurance in the future.
Regardless of the reason for allowing your auto insurance policy to lapse, getting approved for another policy at the same or another insurance company will be very difficult. When you allow your car insurance policy to lapse you are flagged as "high-risk" by auto insurance companies. If you are approved by an insurance company, your premium may be very high, as you've demonstrated high-risk behavior by allowing your policy to lapse or choosing not to renew.
#3: Not having auto insurance is illegal.
If you have a vehicle registered with the state, but it is not covered by insurance, you are in violation of the law. If caught driving without auto insurance, you can be arrested, forced to pay a fine or lose your license.
Prevent an auto insurance policy lapse
To avoid a lapse in your coverage, schedule automatic bill payments or have your insurance company send you a reminder every time your payment is due with a bill, e-mail, text message or phone call. If you mistakenly let your coverage lapse at any point, notify your insurance company immediately, and ask if you can be put back on your policy if you pay as soon as you are able. Your rate may still rise, but if you are diligent about paying your bill on time from that point on, your premium may eventually decrease.
If you are in need of a car insurance policy, or looking for a better rate, get car insurance quotes from several reputable auto insurance companies and compare them to find the best rate. An agent can help save even more money by letting you know what discounts might apply to you or by combining other policies you might need (e.g. home, life, power sports, etc.).
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