How to Deal With a Lapse in Car Insurance Coverage

Learn what to do when you experience a lapse in your coverage.In a perfect world, your car insurance policy would never lapse and you would be covered every time you get behind the wheel.

In the real world, any number of things can cause a lapse in coverage, including a late payment, miscommunication between you and the insurance company, and a change in insurance companies just to name a few.

Unfortunately, one of the worst reasons for this problem can be simply because your insurer doesn’t want to renew your policy and you are too late in obtaining coverage from another insurer.

No matter what causes this gap in coverage – as it’s sometimes referred to, it is important to deal with it as soon as possible. The longer you go without the necessary coverage, the more difficult it will be to set things right.

#1 Stop Driving Immediately

The first thing you need to do is stop driving. Driving without sufficient insurance in place is like playing with fire, and eventually you will get burned. If you’re caught, it can wind up costing you a good amount of money and maybe even your license.

It might be inconvenient to ask for rides or have a friend drive you to work, but losing your license for months will be even worse.

Keep in mind that you will be personally liable for any damages if you get into an accident before your old policy is reinstated or you secure a new one.

It doesn’t matter which state you live in, whether it’s Ohio, California, New York, Florida, or anywhere else in the U.S., you can cause serious damage to yourself, your family and others when you drive without insurance.

So the best thing to do is to not drive until the problem is resolved.

#2 Contact Your Insurer 

The second thing you need to do is contact your insurance company as soon as possible. Many lapses in car insurance coverage are simply the result of miscommunication or some glitch in the payment process.

For example, the insurance company may attempt to pull money from your bank account and suffer an unknown and unpredictable problem.

Or your check containing the payment may get lost in the mail and never reach your insurer. These simple misunderstandings could have caused this problem without your knowledge.

So when you discover that your car insurance coverage has run out, make a phone call to the agent or customer service representative.

If the coverage has only been gone for a few days and your previous relationship with the company has been a good one, reinstating your policy should not be much of a problem. But you need to get in touch with them as soon as possible.

#3 Set Up an Automatic Payment Plan

Many of these lapses could be prevented by simply setting up an automatic payment plan. Having the premium deducted from your checking account or charged to your credit card automates the process and greatly reduces the chances of a lapse in auto insurance coverage.

You will need to keep those automatic payments in mind if you change bank accounts or cancel a credit card. If you make such changes, you will need to contact the insurer and give them the updated information they need to keep your coverage going.

You May Need to Contact the DMV

If your gap in coverage was a lengthy one, you may need to contact your state DMV to discuss the situation. Most states have processes in place to identify cancelled auto insurance policies and suspend driving privileges as a result. If your policy lapses and the DMV finds out about it, the state may suspend your license. If that happens, you could get in big trouble if you are caught driving on that suspended license.

No driver wants to suffer a lapse in coverage, but it does happen. If you find that your own policy has lapsed, the steps you take next can mean the difference between losing your license and keeping your wheels rolling.

It can also mean the difference between you keeping more of your hard earned money to yourself, or having to give it away to someone else in the form of fees and fines because you let your insurance run out or go unpaid.

Whether you drive an old clunker or a brand new sports car, you need to have sufficient insurance in place. Driving without auto insurance is irresponsible and very dangerous.

If you get into an accident and do not have adequate coverage, you could be held personally responsible for repair costs to the other vehicle and medical bills for the other driver and passengers.

So getting back up to date with your insurance policy is imperative. It would be a shame to lose your license because of something that could have been taken care without much effort.


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