What is A Car Insurance Lapse & Tips to Reinstate
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A lapse is car insurance can be a serious issue as it leaves you exposed to certain risks as well as penalties. If this happens to you, then you will need to take action as soon as possible.
What is a Lapse in Car Insurance?
A lapse or gap in car insurance coverage is the period that exists when you old car insurance runs out and you have not renewed or have yet to purchase new car insurance to cover your vehicle.
The insurance industry considers a lapse to include the following;
- Until you get new car insurance
- Your vehicle registration expires
- You surrender the vehicle plates
- You’ve purchased at least minimum coverage in another state if you have moved
- Provide proof that your vehicle no longer needs car insurance
The most common reasons for a lapse in insurance is not paying your premium on time or failing to renew the policy. Another reason is an excessive number of accidents or traffic violations that preclude you from renewing your insurance with the company and having to find another insurer.
What Happens if Car Insurance Lapse?
If you let your policy lapse, it can cause a number of issues to occur depending on the state where you reside that includes, but is not limited to the following;
- A suspension of your driver’s license
- A suspension of your vehicle registration
- Reinstatement fees and fines
- SR-22 financial responsibility to be filed
Of course, if you are caught driving without insurance, then you could face serious fines, a suspension of your driver’s license, an increase in premiums, and even community service depending on the severity of the laws in your state.
How to Reinstate Your Car Insurance?
In order to get car insurance after policy lapses, it will depend in large part on how much time has elapsed. If it’s only been a few days, then you may be able to convince your insurance carrier to reinstate the policy with no penalty. This happens quite often when people forget to renew their policy. However, if it has been longer than a few days you will probably face some penalties.
If you have racked up an excessive number of fines or accidents, then you may be unable to renew your policy and will have to go somewhere else. You will have to pay a higher rate and it will be best to shop around and get some free quotes from us first before purchasing new insurance.
A gap in coverage can bring about a significantly higher cost in premiums, so the best way to handle such an issue is to avoid it in the first place. Try to pay for all of your coverage at once or set up a system that automatically deducts from your account the money necessary to pay for the premiums.
In any case not paying your car insurance can be a serious event that may wind up in you having to pay higher premiums as a result.