What Happens If My Car Insurance Gets Cancelled?

It is very important not to let your car insurance get cancelled. A cancelled policy results in a lapse in coverage which has major implications depending upon the state you live in and it's laws regarding uninsured cars. It is a requirement for all registered cars to have liability coverage in every state in the US. If you have a lapse, then you may be fined and , in some states, will actually take your license plate. Another problem with letting your auto insurance lapse is that it may be very difficult to obtain a new policy anywhere near your previous rate. Many companies now consider you high risk after an involuntary lapse of coverage.

You can have your insurance cancelled for several reasons including not paying your premium payments and/or excessive claims or moving violations. If you didn't pay your premium because of the cost, then allowing it to lapse will only make it even more expensive. Paying your car insurance bill ranks right up there with the rent or mortgage. Don't let it lapse!

How To Get Auto Insurance After a Lapse in Coverage

First, understand what exactly a lapse in coverage means. A lapse in coverage as considered by car insurance companies is when you don't have liability coverage for a registered vehicle in your state. They don't care if the car is never driven, garaged, or not driven every day. If you don't have liability coverage at any moment, then it's a lapse. If you voluntarily gave your plate to the DMV and cancelled your coverage because you no longer own a car and prefer to bike, take a bus, etc., then this is not considered a lapse.

All insurance companies are required by law to give you written notice of a pending cancellation of your policy. If the pending cancellation is due to payments, then get the premium paid quickly before the termination time and date. If it's due to excessive tickets, moving violations, etc. , then you need to find new coverage fast before the cancellation takes effect. Waiting until after cancellation will just make the situation worse.

If you've let your liability coverage lapse , then you should immediately find new coverage with another insurance company. If you are shopping for car insurance and want to compare rates, then we suggest that you compare policies and rates from several insurers. We recommend Insureme who allows you to compare several rates from dozens of major, highly rated insurers such as Met Life, Allstate, AIG, and more.

Be sure to be honest with each company you apply with regarding your lapse. If you don't and you try to keep the lapse secret, your policy will be voided once they find out. A voided policy means that it was never in effect and any claims paid may be voided or they could sue you to recover any payments. Definately not good!

Expect to pay higher premiums with the new coverage. You can't avoid it. Eventually, over time your premiums will return to normal after several months of a good payment and claims history. Keep a safe driving record and you will eventually be taken off of the high risk group and you could qualify for standard insurance.

This should not be considered financial advice which can only be given by a qualifed financial professional. We suggest you consult with a qualified financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium some of which may not be mentioned in this article. We are an affiliate of the Bankrate Insurance Network.

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