If you let your auto insurance coverage Lapse it doesn’t seem to be that serious of a matter on the surface. It is not only illegal to drive without insurance; it can also have much more severe consequences than a ticket for driving without insurance. A lapse in auto insurance can have far-reaching results with the potential to affect your entire life.
All drivers are legally required to carry a minimum liability policy to get behind the wheel. This protects all drivers on the road by ensuring that in the event of an accident, the at-fault party will have insurance to pay for the damage and sometimes have to carry an sr-22 filing.
If you think you can’t afford to pay your insurance premiums, you can’t afford to pay them. If you are involved in an accident where you are found to be at fault and have no insurance to pay the damages, you will be responsible for the first 10,000 dollars. If you cannot, they will suspend your license. This can add up quickly in a more severe accident with a lot of property damage and injuries. You may not have the thousands of dollars to pay the bills, but with a judgment against you, your wages can be garnished, and other assets placed in danger. Not paying that insurance premium can lead to paying off a tremendous amount of money for the rest of your life.
Future Insurance Premiums
Some insurance companies won’t even take a driver who does not have previous insurance, while others will charge you a higher premium. A lapse in your old policy can mean you will no longer qualify for the rates you were getting. You may lose discounts, including longevity, with your insurance company or be treated as a higher risk to the company. You may also have to make a new down payment or pay reinstatement fees. It can take a while to work your way back up to get better rates reserved for the company’s best customers. Some insurance companies may also have a limit on the number of times you can lapse before they refuse to reinstate you.
A lapse in your insurance policy can be much more costly than continuing to pay your premiums. If you are having trouble paying your insurance bill, talk to your agent about ways to reduce your prices rather than allowing a lapse to occur in the first place.
Don Westerfeld has been active in the field of Insurance and Financial Planning since 1997. Don grew up in Indiana later moving to Lakeland Florida where he continues to reside with his wife and children. When he’s not in the office you can find him enjoying the great outdoors. He has served on several charitable business and non-profit organizations and continues to provide guidance, advice and support to local charities.
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.