The Top Reasons to Avoid a Lapse in Car Insurance Coverage

October 31, 2019

A lapse in car insurance coverage is bad, plain and simple. Do you like taking chances? That’s what you do when you are without car insurance. It’s a financial gamble. If an accident occurs, you are financially responsible for the damages. Not only that, but you could find yourself in legal trouble.

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Keep reading to learn the top reasons to avoid a lapse in car insurance.

It’s the Law

First of all, you must have liability insurance. It’s the law. If you cause an accident and don’t have insurance, you may face legal trouble. At a minimum, you must carry the state’s liability insurance requirement.

Each state has different requirements and penalties for driving without insurance. Some charge hefty fines. Some suspend your license and yet some require jail time. It’s not worth the risk.

It’s Expensive to be Without Insurance

If you can’t afford your monthly premium, find a way. Paying the premium is a lot less expensive than paying the damages in a car accident. If you cause the accident, you must pay for the damages to all vehicles and people involved. We could be talking tens of thousands of dollars or more.

It Hurts Your Insurance Record

Insurance companies keep a record of everything you do when driving/owning a car. If you have a lapse in coverage, it goes on your record. That makes other insurance companies consider you high-risk. While they may still insure you, it’ll be at a higher cost.

Why Does Car Insurance Lapse?

Now that you know the reasons not to let a lapse in car insurance coverage occurs, let’s look at why people let it happen:

  • Oversight – Life happens. You may just forget to make your payment. Some insurance companies have a grace period, but it’s not long. If you don’t make your payment on time, your policy may cancel.
  • Not enough money – Again, life happens. If you don’t have the money for your premium, you shouldn’t drive – plain and simple. You put others on the road at risk of an accident that you can’t cover. Borrow the money or don’t drive until you reinstate your insurance.
  • Your car isn’t working – Many people assume they can cancel their insurance if the car isn’t drivable. We don’t recommend it. Keep the insurance because again, you never know what might happen.

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How to Handle a Lapsed Car Insurance Policy

If your car insurance policy lapsed, get in touch with your insurance company right away. If it’s your first offense, they may reinstate your policy right away. The insurance company may charge a reinstatement fee, but that’s the least of your worries. At least you’ll have coverage right away again and aren’t a risk on the road.

If your insurance company won’t reinstate your insurance, try getting on a family member’s insurance as another driver. A constant history of car insurance helps keep your risk low. Remember insurance companies see your history – they use that to determine your premiums and whether they’ll insure you. Avoiding a lapse at all costs is important.

Change Policies

If your current insurance is too expensive, talk to your insurance agent. You can also shop around. You can change car insurance policies at any time, even in the middle of a term. Your agent may have other options for you, such as increasing the deductible, eliminating certain riders, or lowering your coverage.

As long as you have the minimum required coverage by state law, you’ll avoid serious consequences. Of course, you want enough coverage to help you should the worst occur. Also, check with your bank, if you financed your car. They may require certain levels of not only liability insurance, but comprehensive and collision insurance too.

Avoid a lapse in car insurance coverage at all costs. In the end, you’ll pay more, whether in penalties, paying for an accident, or higher premiums. It’s not worth the risk. If you get into trouble, contact your insurance company and find out what options you have. Canceled insurance policies only lead to more problems down the road.
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