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Whatever reason you have, not paying your Auto insurance bills is an expensive mistake that can have long-lasting and hard-hitting repercussions. If you do not pay your bill, your policy lapses, which ultimately means you are no longer insured. If you happen to get into an accident during this time, you will not have your insurance to help out financially with any portion of the accident (this includes you, your car, any other cars involved, any other injuries sustained by others involved, and any resulting legal fees). You also will likely lose your license if you get into an accident without insurance.
Even if you don’t happen to get into an accident during this lapse in Auto insurance, there are other consequences to consider. If you financed your car through a bank or finance company, they have the legal right to make sure their asset is protected. In the loan paperwork you signed, there is a clause that explains exactly what will happen if you let your insurance lapse. This could mean repossession or it could be force-placed insurance imposed on you. Force-placed insurance tends to be drastically more expensive with reduced coverages and if you fail to pay for the policy, your car will more than likely be repossessed. You can replace the force-placed insurance policy with another insurance policy you find but you will have to pay for the amount of time you had the force-placed policy.
If you do happen to have a lapsed policy be sure to not drive the car under any circumstances and end the lapse as quickly as possible. If you simple forgot to pay your bill and it’s only been a few days, call your insurer and ask if they will reinstate your policy as they may be willing to help out. However, expect your premium to be higher if the lapse goes past a week. If you have not had insurance for months, know that insurers are more likely to charge a higher rate and some may not be willing to insure you at all. Here are some tips for finding an affordable policy even after a lapse in coverage:
If you ever find yourself in a position where you are concerned about paying your Auto insurance bills on time, consider the following information in order to avoid coverage lapses:
*Information courtesy of Trusted Choice