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Getting Auto Insurance After a Coverage Lapse

For many drivers, getting car insurance is even more complicated than it is for the general driving population, due to lapses in coverage making affordable coverage harder to come by. A lapse in your auto insurance coverage is something you should do everything within your power to avoid. Still, coverage lapses do happen all the time, and if you have experienced a lapse in your auto coverage, you have to deal with the situation the best way you know how. Understanding what does (and does not) constitute a lapse in auto insurance coverage can help you to avoid lapses in coverage. Learning some of the most common reasons drivers have for allowing their coverage to lapse can give you insight to be more watchful and keep your insurance current to avoid letting a lapse happen to your coverage.

What is an Auto Insurance Coverage Lapse?

Generally speaking, an auto insurance coverage lapse occurs when you do not have car insurance for your vehicle for any period of time. Even a one-day period of time in between the expiration of your current policy and the beginning of a new one is technically considered a lapse in coverage. The main reason for lapses in auto insurance coverage is non-payment on the part of policy holders. If you fail to keep up with the payments on your auto insurance coverage, your coverage may lapse and you may be left without any coverage at all.

In some cases, short lapses in coverage due to late payments will be forgiven by auto insurance providers. Even so, your coverage history will still show a lapse in coverage, which can affect prices offered to you by other companies down the road. Any period of time in which you do not have insurance coverage for your automobile is considered a lapse, even a period as short as one day. Also, the effective date of coverage will be moved on any new policy issued by your insurer once they receive your payment. For example, if your old policy expired on the 20th and the insurance company does not get your payment until the 22nd, if they forgive the lapse in coverage and do not raise your rates they will issue you a new proof of insurance and new policy paperwork referencing the 22nd as the effective date of coverage. Any other company researching your coverage history will notice a lapse in coverage between the 20th and 22nd. Again, in many cases a short lapse like this may be overlooked, but making a habit of this will certainly be damaging to your status with the company and your premium rates.

Just as it is important to know what constitutes an insurance lapse, it is also important to know what does not. If you sell a vehicle and do not immediately replace it, leaving you with no car, your coverage is not considered lapsed. As long as you have proper coverage you keep current for the entire duration of time in which your own or lease a car, you are not lapsed in your auto coverage. If you do not have a car to insure, there is no reason to worry about a coverage lapse, as long as you have coverage as soon as you buy another vehicle.

Reasons Drivers Have for Lapses in Auto Insurance Coverage

Drivers who let their auto insurance lapse have many reasons for allowing their coverage to expire or be cancelled. In many cases, the reasons are purely financial. Some drivers have come up on challenging economic times, and simply cannot come up with the funds necessary to keep up with their payments. In other cases, the auto insurance lapse can be traced back to an accidental mixed payment. Forgetting to pay a bill is something that could happen to any of us, and if you forget to pay an auto insurance bill, you are essentially (if unwittingly) allowing the policy to be canceled or to expire.

Drivers may have other reasons for allowing their insurance coverage to lapse; but regardless of the reason, the effect on the auto coverage is the same. Allowing your coverage to go into arrears will force your auto insurance provider to cancel your coverage for non-payment. Thus, you will not only have a lapse in coverage showing on your car insurance record; but your coverage history will also show a cancellation. Any kind of coverage cancellation, regardless of the reason for it, will end up costing you considerably in the way of increased premiums for coverage on future policies, as long as the cancellation remains on your record.

While the financial effects of a lapse in car insurance coverage will not follow you forever, and your insurance rates will eventually settle back down assuming you keep up your coverage and maintain a good driving record, it is still greatly advantageous to do everything you possibly can to avoid a lapse if at all possible. Though it is never a great idea to lend money from friends or family if you can avoid it, doing so may be worthwhile if it can help you to avoid a lapse. This is particularly true if the financial shortcoming you are experiencing is a temporary one, such as a situation when you have money coming in later in the month, enough to cover your premium but just not arriving soon enough to make the payment in time. Once again, if you should decide to go this route, you should consider asking for a loan very judiciously, and with the understanding that by solving one problem, you may be creating another one.

Keep Up With Payments to Avoid a Coverage Lapse

The bottom line is, not matter what your options may be for getting yourself out of a situation you create when you fall behind on your auto insurance payments, the best option of all is to not get behind in the first place. This might sound smug and maybe a bit overly optimistic, but if there is any way you can keep up with your payments and keep your coverage up-to-date, you should do it. Sometimes in the financial ebb and flow of our financial lives, we have to make certain adjustments in order to survive the ebb while we are awaiting the flow. Reordering your financial priorities and limiting your other expenditures to the greatest extent possible can help you to stay current in your auto insurance payments and prevent any kind of coverage lapse.

In this day and age, millions of Americans all across the country have been forced to make difficult financial decisions, sacrificing some of the things they want in order to make sure they have the things they need. Reordering your priorities and making renewed efforts to take care of your every obligation will require some effort on your part, but doing so will greatly improve your long-term financial outlook. If there is any way you can, avoid a lapse in auto insurance coverage by keeping up with your payments. If you have already experienced such a lapse, limit the damage the best you can by making sure you're covered going forward.

 

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