Many financially straining situations can come up that prevent you from being able to make important payments, such as your monthly auto insurance payment. This can result in a lapse of coverage. A lapse is when you stop paying your auto insurance bill or you sell your car without telling your auto insurance company and so you stop making payments. Here's what you should know about having a lapse in auto insurance coverage:
There are Severe Consequences:
Lapsing in auto insurance coverage is something that you should avoid at all costs by either borrowing money to pay your bill or selling items in order to pay for this high priority bill in your life. If you lapse in coverage and you continue to drive, you will be personally liable for any car accident that you are in. Plus, if you are caught driving without insurance, you will be subject to high court fines. Once you are ready to buy new insurance after lapsing in coverage, you will be seen as a high-risk customer because auto insurance companies cannot be certain that you will pay your bill on time. This often leads to higher auto insurance rates making holding an insurance policy even more costly.
Two Options When you Lapse:
In most cases, there are only two options that you have if you do happen to lapse, but you want to avoid the consequences. You can either request a reinstatement or you can ask your family member or friend if you can be listed as a driver on their auto insurance policy. A reinstatement means that your auto insurance carrier will continue to hold you as a customer and help you avoid a lapse, which will likely be the case if you have a good standing with your insurance company. This means no previous lapses in coverage and no major claims that have been filed.
There are Exceptions:
There are some instances where a lapse in coverage will not hurt you. For example, if you are in the military and are deployed, you are not going to suffer the consequences of a lapse in coverage. Many teens who are newly licensed will also be an exception, as well if they do not have parental help with their insurance coverage.
By knowing these things about lapsing in auto insurance coverage, you will know what you have to do if the situation were to happen to you. For more information, contact companies like Insure With U.S.Share