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What Happens in Case Your Car Insurance Lapses?

Your insurance provider notifies you when your auto coverage is about to expire. In this scenario, you need to respond with the next line of action, whether to renew or cancel the plan. It is never a good idea to let your car coverage lapse because it can lead to higher insurance rates, fines, and lack of protection in the event of an accident.

What comprises a car insurance lapse?

A lapse in car insurance or auto coverage is the time when a registered car is without coverage. Premiums are payments made in exchange for coverage of your vehicle, should damages or losses occur. These payments are made periodically, usually monthly, to the provider. Failure to keep up with payments can lead to a policy cancellation, leaving you without coverage. Your coverage could lapse because you were deployed, you no longer drive, or for other reasons.


What happens in case my car insurance lapses?

Here are some of the disadvantages of a lapse in auto insurance:


  • More expensive premium values If you let your auto coverage lapse, you face paying higher premiums later. The penalty of a lapsed coverage varies from provider to provider. If you are informed about a lapse in your car insurance, a quick reaction can be helpful because some providers may forgive if it is only a day or two. Providers tend to view policyholders with lapses as high-risk, hence they may be charged higher premiums.


  • Heavy State fees penalties Some states have legislation requiring a minimum level of liability insurance for all drivers, so failing to meet this requirement can attract serious consequences, e.g., such an offense in Alaska and Connecticut can lead to your license being suspended


  • SR-22 (Safety responsibility) certificate requirements One of the state penalties for driving without the proper car insurance may be to carry an SR-22. SR-22 is a state-required certificate of financial responsibility, which guarantees that you have the required amount of coverage mandated by the state laws and will be held financially accountable in case of an accident.


These are the instances where a driver can be asked to carry an SR-22:


  • A conviction for driving without insurance

  • After suffering an accident while driving without insurance

  • Having to reinstate your license after it has been revoked or suspended

  • Road safety rules violations, like negligent or rash driving

  • Committing several traffic offenses within a short time

  • A DUI or DWI


An SR-22 can also make it difficult to take out a new policy because the provider sees you as high-risk. Policyholders with an SR-22 may be charged up to $3,000 more on their premiums compared to others. This certificate remains on your driving record for between one to five years, during which you will be charged higher premiums.


Here are some of the ways to avoid a lapse in your auto coverage:


  • Do not get behind the wheel throughout the lapse period. It is best to avoid driving until everything is sorted out to avoid penalties.

  • A quick reaction can go a long way, so call your insurance company to know if they can forgive a few days of policy lapse.


Mayer Insurance provides customized car insurance policies at affordable rates to suit your specific needs. Contact us today to get started!

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