What Is a Car Insurance Lapse? – A car insurance lapse is most often taken with levity; however, there are severe issues that may occur if it is not addressed as soon as possible. A lapse in coverage automatically means you no longer have insurance and this could lead to serious issues if you are caught driving without insurance. In most cases, you will face severe penalties which include payment of a fine, serving a jail term, and loss of driver’s license.
In this article, we will be exploring what a car insurance lapse means, how to avoid it, and other valuable information.
What is a Car insurance lapse?
A car insurance lapse is typically a period whereby a car owner does not have auto insurance as a result of inability to meet up with his/her insurance payment.
In most states, except Virginia, drivers are required to carry minimum liability coverage of car insurance. So, if caught driving without insurance, it could result in legal consequences. To avoid a lapse in your car insurance, it is best to meet up with your patients and explore other alternatives that may be of great advantage to you.
How Can I Get Coverage After An Insurance Lapse?
An insurance lapse is not usually a glamorous situation, so if you miss a payment behind your insurer’s grace period, the ideal thing is to purchase a new auto insurance policy immediately. Getting a new policy guarantees you coverage for a wide range of road perils. It also means you’ll be able to drive legally and rebuild your driving history. You can seek advice from an insurance agent or any other professional on how you can forge ahead regardless of a lapse in your insurance.
How Do I Avoid a Car Insurance Lapse?
The easiest way to avoid a lapse in your car insurance coverage is to pay your premiums on time. Most lapses that occur from auto insurance are a result of failure to meet up with the payment or to renew a policy. Nevertheless, there are other ways you can still avoid a car insurance lapse. You can set up auto-pay on your auto insurance; this is to ensure that you do not miss your monthly payment. You can also make a deliberate effort to pay all your premiums at once; this especially brings peace of mind knowing you have no outstanding payment. Furthermore, you can consider receiving emails and texts from your insurance provider to notify you before the date you are to make payments.
How Long Is a Car Insurance Grace Period?
The grace period for car insurance is dependent on the insurance company you work with. Some may decide to offer you a grace period of 24 hours while others could be as long as 30 days. It is important to know the system in which your insurance works so you can have a proper understanding of how to catch up on your payment and affect your insurance coverage back. Nevertheless, most insurance companies are obligated by the law to notify you before canceling your insurance policy. So, you have enough time to redeem your payment or better still, work with your insurer on other alternatives.
How Long Does a Lapse in Car Insurance Stay on Record?
Well, this depends on the insurance company, the state you reside in, and most importantly, the length of the lapse. A car insurance lapse can stay on your record for as long as 6 months to three years. The longer the lapse, the longer the time it stays on your record, and vice versa.
However, if the lapse in your car insurance was less than a month, you could still be able to get your policy reinstated after it got canceled. But this decision solely lies with your insurance company and the circumstances that led to the lapse. For your policy to be reinstated, you are required to pay outstanding debts and reinstatement fees.
On the flip side, if the lapse on your insurance was more than a month, the next course of action will be to beg for a new policy. In most states, you will also be required to file an SR-22 for three years.
What to Do If You Can’t Make an Auto Insurance Payment
Several alternatives may work if you are unable to meet up with your auto insurance payment. One of the major things is to notify your insurer of your inability to meet up with your monthly payment. They may be willing to work out something with you if you have not missed a payment before.
On the other hand, you can also avoid canceling your insurance policy because it could lead to increased rates. After all, most insurers consider you a high-risk driver. However, if you still insist on canceling your policy, you can try out these options before making that decision:
Shop Around For Affordable Auto Insurance:
There are some cheaper rates that you’re most likely not aware of that could help you cut costs. It is advisable to shop around for cheaper insurance policies, you can also ask for discounts that you are eligible for. Most insurance companies use different factors to charge for premiums, so when you compare prices from multiple insurers, you’ll be able to choose the best one for you.
Reduce Your Coverage:
It often makes financial sense to reduce the amount of coverage you have on your auto insurance, this would help you in making timely payment. If your auto insurance policy includes comprehensive and collision coverage and you don’t have a car loan or lease that demands having full coverage, you can drop this coverage to lower your rates.
Increase Your Deductible:
This is also another great option rather than outright canceling your insurance policy. If you raise your deductible, you’ll most likely be charged lower rates. This would enable you to keep up with your auto insurance payment. However, make sure you can afford the higher deductible. If there’s a need for you to file a claim in the future.
All of these are alternatives you could opt for before canceling your auto insurance policy. However, if you still insist on canceling your policy. Ensure you do use the car in the meantime since it’s illegal to drive without in most states.
Conclusion
Having a lapse in your car insurance coverage may not seem like a serious issue. However, it could lead to potential expenses and a series of problems. Most times, you could even be faced with legal consequences if you fail to meet up with your payment.
To avoid car insurance lapse, it is advisable to make payment on time and always carry your proof of insurance. Per Adventure, if there’s a lapse in your coverage, ensure you pay all due amounts. This will help to get your policy running again.