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A lapse in car insurance coverage implies discontinuity of coverage and there could be several reasons due to which such a situation might arise. Your auto insurance policy may have run out as you failed to renew it on time or your cover got cancelled because of missed payment. Whatever may be the exact reason for termination of your car insurance coverage, you cannot drive car legally on road. The following are couple of reasons which may cause auto insurance lapse. .
1. Policy non-renewal -Most of the companies cancel car insurance policies when drivers miss monthly premium payments or forget to renew their car covers. And the state DMVs are notified to this effect on account of which a driver can no longer drive his/her vehicle or else pay hefty fines if caught by traffic inspectors.
2. Overseas assignments - If driver is on overseas assignment for job or studies then he/she is less likely to drive car. Such a situation can lead to suspension of insurance coverage not amounting to lapse. But things can be different if you haven’t provided an affidavit to your state’s DMV intimating the same before departing.
What Happens If Your Car Insurance Lapses?Insurers don’t cancel car insurance policies as soon as drivers miss premium payments. By law, they are required to issue notice to errant drivers, whose coverage has lapsed, within 10 to 20 days by sending mail or email. This time period is typically referred to as insurance lapse grace period.
If your situation warrants you to buy auto insurance with lapse in coverage then you can deal with it in 4 easy steps as follows:
Has your car insurance coverage lapsed? Contact an expert to get it reactivated now!
Get a Quote nowIf there is lapse in auto insurance coverage, the consequences could be far more serious than you can ever think. Here is some vital information relating to the same which you might find extremely useful.
Without valid insurance coverage, you cannot drive a vehicle legally on road. If you drive car after its insurance has lapsed and meet with an accident, causing bodily injuries or damages to other person’s property, then you may have to bear all costs towards hospital treatments/property repairs on your own to prevent other persons’ from filing a lawsuit against you.
If you are caught by a traffic inspector while driving car without valid insurance coverage then it is possible your driver’s license might be suspended over and above paying hefty penalty. Your state’s DMV will be notified regarding license suspension and so, you may to go through a stringent legal process for getting your license reinstated including filing SR-22 certification. This way you will have to spend a huge amount of money on attorney’s fees as well as court procedures.
For insurers, lapse in car coverage could mean that they are dealing with a “high risk” driver. To compensate their coverage risks, companies charge substantially higher premiums. Such a move will also affect your insurance record adversely.
If your car is on finance and your coverage has lapsed, lender may simply repossess the vehicle as there are financial risks involved. If the financed new car meets with an accident and gets badly damaged or even totaled. In such a situation, lender has nothing to recover.
A car insurance lapse can get you the tag of a high risk driver! Just avoid it at any cost!
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It could be perfectly possible to avoid a lapsed car insurance policy by taking the below mentioned things into consideration:
1. Make sure that you pay monthly premium instalments on time every month. The best way to ensure that is to choose an automatic payment schedule.
2. For keeping monthly or yearly car insurance costs within your reach, you can think of buying basic liability coverage as mandated by your state’s law.
3. Try and maintain a clean driving slate so that you win your insurer’s confidence. And if possible, pay entire annual premium amount in lump sum to get a special discount.
4. Don’t purchase unnecessary coverage features as it will stretch your budget. Determine the right amount of coverage levels for your car and also how much you can afford to spend.
Apply NowThe only way to avoid a possible car insurance lapse in coverage is to compare proposals provided by other auto insurance providers. The shopping task can be a bit cumbersome but there is hope at the end of the tunnel. CarInsuranceNoDownPayment can assist you in arriving at an informed decision on your purchase.
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