Car Insurance Lapse

Basic liability car insurance is required in almost every U.S. state and a lapse in car insurance can lead to fines or the suspension of your license. The reasoning behind making this kind of coverage mandatory is sound: if someone drives, they need to be financially accountable for their actions while behind the wheel. From the moment someone begins learning how to drive a car they are expected to be insured without interruption. A car insurance lapse is unacceptable to the authorities and insurers, and drivers who don’t buy cheap car insurance and drive around with lapsed insurance are putting themselves in harms way.

What Does “Car Insurance Lapse” Mean?

A lapse is defined as the “cessation of a privilege, right or policy due to time or inaction.” If someone does not pay their monthly car insurance premiums on time, their coverage will lapse, regardless of how legitimate their reasons for not meeting their obligations might be.

A car insurance lapse is especially serious, because once coverage is lost for even a day, many discounts can be lost. Most policyholders have no idea that their lapses in coverage are a matter of record and impact their future car insurance rates. Insurers are bound by law to report policy beginning and ending dates.

A Bad Decision

When faced with an economic crisis, consumers tend to evaluate their bills by their perceived importance. Obviously utilities, food, housing and transportation are indispensible, but too many people view car insurance as something that can be cut. They think, “I’m a good driver. I’ll just be extra careful,” when they let their car insurance lapse, but they don’t realize the legal and economic repercussions of this decision.

Even if the person doesn’t get pulled over or have an accident, the car insurance lapse is a matter of public record and will be used to justify higher rates in the future.

Expect The Unexpected

Regardless of the best intentions and driving skills, accidents will happen. Whether an accident is their fault or not, a policyholder will have serious legal and financial problems if a car insurance lapse has occurred for any reason. If the police or other emergency services show up at the scene, they will request proof of insurance from all parties involved.

This will result in being cited for driving without insurance, and the minimum someone can expect is a hefty fine. Suspension of driving privileges and even jail time is possible.

Penalties For Allowing A Car Insurance Lapse

Aside from the immediate fine and suspension of their driver’s license, there are other consequences of allowing a car insurance lapse to occur. If a driver caused an accident, he/she will be responsible for paying for any damages or repairs to the other vehicle, as well as any medical bills for injured passengers, not to mention the damages to their own vehicle or personal injuries.

The lapse in coverage will also be a matter of public record, so whenever the policyholder seeks new car insurance, the company will not be able to provide the cheapest car insurance rates.

Read Your Mail!

One of the main reasons for a car insurance lapse is irresponsibility on the part of the insured about when their premium payments are due, or not reading their mail. Insurance companies are required by law to announce any policy changes, including cancellations, ahead of time and in writing to the insured. This advance notice gives customers time to find alternate insurance from another company when switching carriers.

However, many people neglect their mail, thinking that the letter from the insurer is a bill or junk mail. Ignorance is no excuse if the insurance company has performed their obligation.

Avoid A Car Insurance Lapse

The best method of dealing with a car insurance lapse is to not allow it to happen in the first place. Don’t compound financial problems by making the situation worse. If your auto premiums are already high, they will only get higher after a lapse.

Get cheap car insurance and make the payments on time, every time. Read all mail and stay in communication with the insurer. Eliminate unnecessary coverage, raise the deductibles and actively seek discounts so that coverage is more affordable. It is better to remain compliant with the law than to deal with the consequences later.

Even those in severe financial straits need to adhere to the laws of the land. Auto insurance is important because it protects all parties involved, and allowing a car insurance lapse to happen only sets the stage for more problems. The good news is that, with a car insurance quote comparison, it’s quite easy to find affordable car insurance.

Car Insurance Quotes

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