Stress and financial hardship is the seed for having to juggle expenses and making financial decisions, as to what bill too pay and what to let slide. When money is tight, everyone is evaluating ways to reduce outgoing expenses.
One idea maybe, is to not pay the car insurance premium, resulting in a lapse in your insurance policy. All the while, we do have the intentions to pay the back premium or one may even say, “I will reinstate my policy again soon” however, letting your policy lapse is not a good idea, especially with the increase of hit and run accidents, reckless driving behavior, carjacking, and theft, which could cause unexpected financial problems.
Financial problems like the risk of being sued, attorney fees, driver’s license suspension and more. Listed below are a few key reasons to stay protected and avoid a lapse in coverage:
Insurance rate increases
After your insurance policy lapse and you are not able to reinstate your policy, it maybe difficult to find insurance at an affordable rate. Most times, you will have to take coverage with a company that specializes in risky drivers, and that’s never a good idea because high-risk insurers charge more for their policies.
Legal requirements
Most states require a basic level of auto liability insurance. Liability pays for the other person’s medical bills or property damage from the accident, if at fault. Therefore, if you own a car and you let your liability insurance lapse, you maybe in violation of the law, even if the car is parked and not being driven. Also, if you are driving with a lapsed insurance policy and you’re involved in and accident, you will be cited and subjected to stiff fines or worse.
Drivers license record impact
Some states require insurance companies to notify the Department of Motor Vehicle (DMV) when you let your coverage lapse and it maybe noted on your drivers record. Also, your car could even be seized or license suspended.
Financial Consequences
Driving without car insurance is very risky because if you’re in an at fault accident and don’t have an active insurance policy, you maybe sued to pay for the damages and injuries, including lawyers fees, out of pocket.
Avoid a lapse in coverage
The benefits of keeping an active insurance policy should be a priority and the goal is to keep your car insurance coverage affordable and compliant with state laws. The best resource for keeping your policy protected is your local agent. They will assist you with all your policy needs including a lapse in coverage.
-Auto policies are cancelled for two main reasons: non-payment and driving offenses. As an auto owner, we are responsible for consistently paying our insurance premiums and for driving safely. However, if you have too many tickets and or accidents on your driver’s license record, may cause your insurance company to cancel your policy, resulting in a lapse in coverage.
Discuss affordable coverage options with your agent about discounts that you may qualify for to help keep your premium low. Schedule annual personal insurance review (PIR) with your agent, to assess your current coverage and discuss ways to adjust your policy based on your current needs.