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Facts About Lapses, Cancellation Or Reinstatement Of Auto Insurance Policies

1. What am I supposed to do if my auto insurance policy lapses?

The first thing you need to understand is that you automatically become an illegal driver if your auto insurance lapses and you still insist on getting behind the wheel. You will face stiff penalties in conjunction with exorbitant fines. Your insurance provider may also decide to increase your premiums. More so, you will not be covered by your provider meaning if you get in an accident, you will have to pay for the expenses out of your pocket in addition to paying fines for lack of insurance. A lapse will take effect immediately your coverage is dropped by your insurer. What follows is communication between the insurer and the local DMV about you not having insurance anymore. There is no short cut about it. You will have to resume your policy or get another as soon as you can or stop driving all together.

2. How do I reinstate my policy after a lapse?

If you have had a healthy relationship with your car insurance provider and the lapse is only for a couple of days, contacting them and explaining will suffice because they consider you a good client. On the other hand if you have made this a habit, then your chances get even harder. In addition to making it harder for you to be reinstated by taking too long to do it, the local DMV will also fine for every day that passes after a lapse. For example in the state of New York, motorists are fined $8 for every day that passes after a lapse and increases to up to $12 per day after 60 days. Paying for the premiums and stipulated fines will reinstate your policy. If the auto insurance decides you are too much of a risk they may decide to cancel your policy and all you can do is find another insurance provider.

3. If I want to cancel my policy, how do I go about it?

All you have to do is write to them and or call them and inform them of your intention. Letting it lapse and assuming they will understand will not fly. This is because they are obligated by law to inform your state’s DMV that you are no longer covered. State the reasons why your are cancelling the policy e.g. due to sale of the car, change of insurance carriers or death of the car owner and so forth. This will stop them from penalizing you for a car you no longer have or has a new policy with a different insurer covering it.

Understanding insurance policies can be a tricky and confusing affair and asking questions such as the above will make you more informed in your future car insurance decisions. Also you can get free online insurance quotes from our site at the click of a mouse by entering your state’s zip code above and get matched up with a suitable insurer.