When a person cancels their car insurance before getting a new policy, they can unwittingly cause their future rates to go up.  Most people realize the main factors auto insurers use to come up with rates: car model, accident history, driving record, zip code, marital status, and age.

Many people don’t realize that having a car insurance coverage lapse can cause your premiums to spike.  Believe it or not, going without car insurance can be risky in the eyes of an insurer.

Don’t Let Your Auto Insurance Coverage Lapse

Why Drivers Let Their Coverage Lapse  

When you apply for a new policy, your auto insurance history will be checked out.  Insurers will look for any gaps in coverage, especially if you operate a vehicle while it was not insured.  A gap in coverage is simply any time you go uninsured.

Motorists not insured are considered high-risk drivers and are charged higher rates by insurance carriers.  There are many reasons why someone might have a lapse in coverage.  Some typical reasons include: 

  • Your license was suspended, or you lost it and decided to let your insurance lapse  
  • Your insurer went bankrupt, and your policy was canceled before you got covered elsewhere   
  • Your auto insurance provider terminated your policy
  • You moved overseas and canceled your coverage  
  • You did not pay your bill, and your policy was canceled by your insurer
  • You lost your job or, for other financial reasons, stopped coverage  
  • You sold your vehicle and did not purchase a different car
  • You canceled your policy on your old car because you are getting ready to buy a new vehicle   

 How lapses in Coverage Affect Insurance Premiums 

You might think that canceling your automobile insurance policy will save you a lot of money.  While this might be true in the short run, you could end up paying a lot more over the long haul.  This is especially true if you think canceling a policy for a month or two because you are getting ready to buy a new vehicle will help you.  Oddly, your new policy will end up being needlessly more expensive, and you surely don’t want that.  

Insurers will take a detailed look at your vehicle insurance history, and if you have multiple lapses in coverage, you may be tagged as a “high-risk driver.”  When you shop for a new policy, you might be shocked that your premiums have shot up by 20% or more from your prior rates.  Even worse, if you were involved in vehicular accidents while uninsured, you may get denied by major auto insurance carriers in a worst-case scenario.  You might then be forced to get insured with a high-risk carrier for outrageous rates that could send you to the poor house.  

If you are caught driving while intoxicated (DUI or DWI) without insurance coverage, you will be required in most states to obtain an SR-22 before you can be legally insured again.  The lesson here is simple, if you drive, always carry insurance and obey all the traffic laws. To check your best rate, get a free online quote from Insurance On The Spot. Rates start at under $39 for qualified motorists. 

The High Price of Driving Uninured 

Each state sets forth its own automobile insurance laws and mandates.  While states have different regulatory insurance variances, carrying valid auto insurance is the law in all but one state.  If you are driving a vehicle, then there is no way to get around having insurance coverage.  If you get cited for driving without automobile insurance, you can be penalized severely.  These enforcements include: 

  • Hefty fines can be levied against you.  In some states, a second offense can result in a fine of $1,000 or more
  • Your car can be impounded, which can run into the thousands 
  • Your driver’s license can be suspended    
  • On repeat offenses, you may be sent to jail  
  • You may be required to get an SR22 – financial responsibility certification – that you must carry while driving for several years  

The High Price of Driving Uninured 

All of these penalties carry a high price and cause severe financial damage to most people.  If someone goes to jail, they may lose their job and have a bad record to deal with for the rest of their life.  Driving uninsured is just plain not worth it.

If you cannot afford car insurance, then find other transportation means until you can.  If you need low-income auto insurance, check to see if your state has special programs that can get you discounted rates that you can afford. States like New Jersey have programs with rates starting at $1 dollar a day. Make sure you never drive a vehicle without the minimum state-mandated automobile coverage. 

Getting covered again after a Lapse in Auto Insurance Coverage 

 If there has been a short gap in your policy, contact your insurance provider right away.  Some carriers have grace periods, and you might be able to get your policy reinstated without any penalties.  Most companies do not extend grace periods for more than a month, so this does not apply to those who have gone several months without being insured.  

 If your company terminates your policy, you must shop for auto insurance immediately.  The best place to start looking for good coverage at the lowest possible rates is online with companies like Insurance On The Spot.

It only takes about five minutes to complete an Insurance On The Spot quote application, and you can even use your smartphone.  Apply today for your custom quote and get covered again for less.