Tips to Avoid a Lapse in Auto Insurance Coverage
Driving without insurance is against the law in all but two US states: Virginia and New Hampshire. Everywhere else, valid insurance is a requirement. And even in these two states, drivers are financially responsible for car accidents, so insurance is still advisable. Where it is the law, driving without proof of valid insurance can lead to expensive fines and even a license suspension.
It is, therefore, crucial to make auto insurance payments to avoid a lapse in your coverage. If your policy is canceled by the insurance company, for any reason, it may be difficult and expensive to have it reinstated.
Reasons for Lapses in Auto Insurance
Lapses in auto insurance happen for a wide variety of reasons. Some of the most common are:
Forgetting to pay the bill
Lacking funds to make the payment
The vehicle has broken down
Vehicle was sold or scrapped
Car is no longer driven
Tips for Avoiding a Lapse in Auto Insurance
Use these methods to avoid a lapse in your auto insurance coverage:
Budget for your auto insurance payment each month. Consider having the payment automatically deducted from your bank account to prevent you from forgetting it.
Reduce the cost of your premiums. Shop for less expensive insurance, and talk to your insurance agent about ways to lower your monthly insurance premium. You can reduce coverage to state-required minimums, or ask if you are eligible for low mileage or good driver discounts.
Inform your insurance company immediately if you sell, scrap, or take the car out of service. If you simply stop making the insurance payment, the policy will go into cancellation, and this can put you in a ‘high risk’ category the next time you try to buy insurance.
Be aware that most auto insurance policies roll over at the end of the policy period and renew automatically, so don’t assume you can just stop paying when the policy period ends without taking further action.
What To Do If an Auto Insurance Policy Lapses
If your policy does lapse, immediately contact the insurance company by phone or in-person, and ask if the policy can be reinstated. If you have been paying your bill regularly, have a good driving record, and have not had any other lapses, it is likely the company will reinstate your policy. They may, however, charge you a fee.
If your policy lapses and you experience difficulty getting it reinstated, you may still have insurance options. Find out if you can be added to someone else’s policy as an additional driver. By doing this, you start a track record of auto insurance coverage, which can help you out of the ‘high risk’ insurance category, and it ensures you are able to legally drive.
Updated 09/09/2024
