Top Myths Regarding Lapses in Auto Insurance Coverage – Do You Need a Lawyer
In a study handled by the Insurance Research Council, statistics show that approximately one out of every seven drivers lacks auto insurance coverage. Many times these people are already living from paycheck to paycheck and cannot handle the cost of insurance, especially if they’ve had offenses like serious speeding tickets, accidents and DUIs that drive up the cost of insurance. Despite this, there are other reasons why an auto insurance policy can lapse.
A lapse in insurance occurs when you haven’t paid your bill on time, had a policy cancelled by the insurance company due to serious accidents or have cancelled your auto insurance before you have a new insurance policy in place. Many people believe that you have to cancel your old policy before you start looking for a new one. This is never true. Always wait until your new policy is in place before canceling your old one.
Before leaving on an extended out of country vacation or being deployed, talk to your insurance company. Canceling your insurance for an extended period of time, regardless of the reason puts a lapse on your record. This can lead to higher rates in the future. Instead, look into a non-owners policy that covers you in any vehicle so that you have continuous insurance, but not for your own vehicle.
Every state is different. If you are moving to a new state, you might think it is perfectly fine to use your current insurance company no matter where you live. This is completely untrue. States like New York and New Jersey require you to buy auto insurance through a state approved insurance company.
Many people believe that paying their auto insurance premium a few days late doesn’t matter. The truth is that insurance companies expect payment by the due date. Failure to pay will cause a lapse in your insurance. If you do not pay by the date specified in the reminder, your auto insurance coverage can become canceled. If you are in an accident while your insurance is lapsed, you are not covered! Even if you are only a few days late, your coverage lapses until the payment clears your insurance company.
If your insurance has lapsed and you are in an accident, you can be held accountable for any damages out of your own pocket for both your vehicle and any other drivers/vehicles involved. Should this happen, seek the advice of a lawyer. Not only will you be under a financial strain, but also you can lose your license and in some states your vehicle can be impounded, worse you can face jail time.
