You know you need auto insurance, but the premiums were too high one month. You skipped a payment and now your policy has been cancelled. Your former provider won’t sell you a new policy. When you call around, you find out there are penalties for lapsed coverage.
What does that mean, and how do you fix it? Here’s what you need to know about lapsed auto insurance coverage.
WHAT IS CONSIDERED A LAPSE?
A lapse in your insurance coverage happens when there’s a period of time between when your vehicle is insured and when it is not. What causes a lapse?
- Failure to pay your insurance premiums
- Late payments beyond any grace period the insurance company allows
- Failure to renew your insurance policy
- Excessive traffic violations
- Excessive and severe accidents
How long your lapse lasts is determined by why your insurance was discontinued in the first place. Maybe you sold your car or moved to a new state and for a very brief moment in time, your vehicle didn’t have the coverage required by law. Your lapse continues until one of several things happens:
- You get new coverage for your vehicle.
- You surrender your vehicle plates.
- Your vehicle registration expires.
- You offer proof that your vehicle was repossessed or sold.
- You move and buy new coverage in a new state.
WHAT HAPPENS IF YOUR INSURANCE LAPSES?
Quite a few things go into effect if you let your insurance coverage lapse for any reason or any length of time. It can be much more expensive than your monthly premium, and may even affect your ability to work and drive.
- Your driver’s license may be suspended.
- Your vehicle registration can be suspended.
- You may have to work with an agent to file a SR-22 filing statement.
- It will be difficult and expensive to get a new policy.
In North Carolina, you have to pay fees when your insurance coverage lapses. The first offense is $50, the second is $100, and then any time after that, you have to pay $150 for each lapse. That can add up fast, especially since a lapse will likely raise your insurance premiums, too.
HOW TO GET COVERAGE AFTER A LAPSE
Getting coverage after a lapse can be difficult for most people. If you forgot to renew your policy and remember within a day or two, you may be okay. Call your insurance agent, and they might be able to reinstate your coverage with no penalties. Any longer, though, and they may have to sell you a new policy at a higher rate.
What if your policy was cancelled, though? You want to renew it, but you can’t. Maybe you had a poor payment history. Maybe you’ve had too many violations. It’s highly unlikely your old insurance company will sell you a new policy. You’ll need to search for a new company. Your lapse will count against you, and your premiums will be higher at first.
When you have your policy cancelled, you don’t pay your bills, or any other lapse occurs, insurance companies tend to view you as a higher risk and a less-than responsible driver. Until you prove otherwise with consistent payments and a clean driving record, your premiums will reflect that view.
It’s always best to make sure your auto insurance doesn’t lapse at all. Contact Charlotte Insurance today to avoid a lapse or to find coverage now that it’s happened to you. We’re here to help.