What to Do When Your Car Insurance Lapses

Car insurance can save you a fortune in the event of an unwanted incident. Thus, when you purchase a new car, make sure you get it insured by a reliable company. If by chance you forget to pay your bill and your car insurance lapses, you should take immediate action. Most companies allow you a 10 to 20 day grace period to pay before they cancel your policy. If you still neglect to pay your premium then your insurance will lapse which can hurt you in the long run. Oftentimes your rates will increase and insurers will deem you high-risk or even refuse to insure you. That’s why you should always pay your car insurance premiums on time.

Driving without the minimum required insurance has numerous consequences such as license suspension, fines, and tickets. The penalty for an insurance lapse depends on your state. Thus, it’s best to keep track of your car insurance bills to avoid a lapse in coverage.

What’s a Car Insurance Lapse?

A car insurance lapse is when your current insurer terminates your policy so you’re now uninsured. This can happen for various reasons such as failing to pay your premium on time or your insurer dropped you since you have too many driving violations.

Lapses can last for as little as a day or go on for months or even years. The longer you wait to reinstate your policy, the more you’ll end up paying in premiums.

Also, getting into an accident without insurance coverage can cost you a fortune. You’ll be responsible to pay for any damages or medical bills out of pocket if you’re at fault. You also get fined or worse if you’re caught driving without the minimum required insurance.

What to Do When Your Insurance Lapses

Here are some steps you can take if your car insurance lapses:

  • Immediately contact your car insurance company and ask for the reason. You may have missed your insurance payment.
  • Read the policy and check whether you can reinstate it or not. If you failed to pay your bill, you’ll likely be able to reinstate your policy. However, if it’s been a long time since you paid your bills, you may have problems getting insured again or you’ll pay a lot more in premiums.
  • If the insurance company refuses to reinstate your policy, you can shop around and find a new insurer.

Car Insurance Lapse Penalties

If you want to legally drive your car in the US, then you must have the minimum car insurance coverage. Here are some of the penalties for letting your insurance lapse and driving around uninsured:

You’ll also have to pay out of pocket if you cause an accident without insurance. Such as, you’ll pay for the other party’s injuries and/or repairs. If you want to avoid these large expenses then don’t let your car insurance lapse.

Here’ s how you can do that:

  • Keep a clean driving record
  • Pay your premiums on time (set a reminder or automatic payment)
  • Renew your insurance policy as soon as possible

Conclusion

So, if you want to keep your car insurance rates low and avoid hefty fines, pay your insurance premiums on time. Failing to do so has many consequences and can hurt you financially in the long run.