There are many auto insurance terms that people may have heard but do not fully understand. One of these terms is a lapse in auto insurance coverage. Here is more information about what this term means and how it can affect you and your auto insurance rate.
What Is a Lapse in Auto Insurance?
A lapse in auto insurance basically means that it is a period of time in which you do not have any auto insurance. A lapse in auto insurance typically occurs for a few reasons. The first reason is when an insurance company cancels your policy due to nonpayment. Another reason is that you have canceled your auto insurance policy because you no longer have a car. Or maybe you have canceled your auto insurance policy, yet you have not signed up for a policy that begins as soon as your existing policy ends.
How Does a Lapse in Auto Insurance Affect Your Rates?
A lapse in auto insurance will typically negatively affect your auto insurance rates. Auto insurance companies typically want to see two to three years of continued insurance coverage to put together a quote based on your driving abilities. If you have not recently had coverage, it can be hard to gauge whether you have been a good or safe driver, so your rates are often higher.
How Can You Protect Yourself Against Lapses in Auto Insurance?
In addition to higher insurance rates, certain states, such as Nevada, will suspend your registration and issue a fine if you have even a one day lapse in your insurance coverage for any reason other than no longer owning your vehicle. As such, it is important that you work to protect yourself against lapses. Ensuring your auto insurance payment is made on time helps to protect against lapses. If you are changing policies, ensure you fully understand when your current policy expires and when the new policy begins. Some people prefer to overlap their policies by a day to ensure there are no issues or lapses.
A lapse in auto insurance can affect your auto insurance rates, and the reason for the lapse will not matter. However, taking the time to price out various auto insurance policies and compare rates will allow you to find the best auto insurance for your needs at the most affordable prices, even if you do have a lapse in coverage. Contact an auto insurance service, like Affordable Insurance, to learn more about getting a quote.
Share23 January 2020
I have always been someone who loves to work hard for what they have, which is why I started paying attention to how I was protecting my investments. I realized that although I had great medical and dental insurance, my car needed a little extra protection. I started working hard to find an insurance policy that would work well for my needs, and before I knew it, I was able to sign up for a new policy. This blog is all about choosing a car insurance policy that works well for you and your family, so that you don't have to worry about falling short.