How to Avoid a Car Insurance Lapse

Don't allow a gap in your insurance coverage

A Lapse In Judgement

Allowing your car insurance to lapse is a huge risk to you both financially and physically. Being uninsured for even a few days opens up a window where getting in an accident may incur massive out of pocket expenses that you have to pay. That can be tragic and the best way to avoid it is to make sure that your car insurance never lapses.

Outside of getting in an accident, allowing your car insurance to lapse has more costs that aren’t quite as immediate. Your local DMV will be notified by your former insurance company that you no longer have insurance, that can result in hefty fines if you don’t take care of it quickly. You may also be labeled as a “high risk” driver which will cause a large spike in your insurance premiums when you get back on insurance. These changes don’t affect you immediately, but they can have a huge impact in the long run as you pay more money for your coverage (or lack of coverage).

There are a few ways your insurance can lapse: not paying your premiums, not renewing your policy, a circumstance which caused you or your insurance company to drop your insurance. Your insurance stops covering you and lapses immediately after one of these things happens, so do your best to keep them from happening. If they do happen, get a new policy as quickly as possible. The longer you go without insurance, the worse the penalties will be.

Keeping Yourself Covered

That said, not allowing your car insurance to lapse is pretty easy to do as long as you keep on top of it. If you’re planning on staying with the same insurance company on the same policy, make sure it will automatically renew. If you’re unsure whether your policy will automatically renew, give your insurance company a call and ask them. They will be more than happy to help you out and keep you with them.

If you plan on switching insurance there are a few things to consider, namely when does your current insurance end and new insurance begin? If there’s a gap between those two dates, you’ll want to close that gap by changing the time your new insurance begins. If you get in an accident over the weekend before your new insurance starts, you will not be covered and the costs of the accident will be on you.

In Case of Lapse

If you do lapse on your car insurance, there are two ways to get out of becoming a high risk driver and paying penalties for being uninsured. The first is calling your previous insurance company and asking to get a new policy with them. Often times there’s a “grace period” where being uninsured won’t cause you to be a high risk driver. This could be anywhere from 3 days to 30 days. If you have a good track record with your previous company, they will likely allow you to get a policy with them without becoming a high risk driver. You may incur a small penalty for lapsing, but compared to the costs of being a high risk driver this penalty is tiny.

The second option you have is to get on a family member’s or friend’s policy. This will keep you with a solid insurance record and give you some more time to figure out your insurance situation. Don’t be afraid to ask, lapsing on your insurance and not acting on it is a costly matter.

image courtesy of freedigitalphotos.net

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