What Will Happen if I Let My Insurance Coverage Lapse?

There are many reasons why people may let their insurance lapse. However, it should be avoided if at all possible. Here are several reasons why it’s important to stay protected and avoid a lapse in coverage, and some tips to help you stay on track.

Loss of coverage

From the time your policy expires to the date when your policy is officially reinstated by your insurance company — you’re not covered — for any damages, accidents, or injuries you may cause or that happens on your property. That means if you are found liable for anything during this time, you’re paying out of pocket.

Legal requirements

Did you know the state may take away your driving privileges, even if you are not caught driving while your insurance has lapsed? If you have a vehicle registered under your name, the state assumes you are driving it. Paying a reinstatement fee is only half the battle. You could be charged for criminal fees, court fees, or other costs associated with driving without insurance.

A lot of homeowner associations also require you to have a minimum level of insurance. If you don’t maintain their required level of insurance, a lender has the right to evict. There is a possibility you could lose your home by missing these critical insurance payments.

Increase in insurance rates

Reinstating can lead to higher rates. The longer you take to reinstate your insurance, the higher your rate may go up. With an insurance lapse, you won’t be eligible for as many discounts, which may result in an increase in your rate. In the future, it could be very difficult for you to get affordable insurance, as you will be labeled as high risk.

How you can avoid a lapse in coverage

There are multiple ways to avoid these potential drastic outcomes. Here are a few of our tips to help you stay on track and avoid cancellation and late fees.

Practice responsibility

Car insurance policies are canceled for two main reasons: non-payment and driving offenses. You are responsible for driving safely. Having too many tickets or accidents on your record can result in your policy being non-renewed leading to a lapse in coverage. As a vehicle owner, you are also responsible for paying your car insurance premium on time.

Make your payments on time

• Enroll in EFT to avoid missing a payment. Paying a bill will now happen automatically!
• Pay your bill in full if you can. Did you know paying your auto insurance in full could give you a discount on your overall premium? Up to 6% for some carriers!
• Set up a reminder on your smartphone every time a payment date comes up.

The benefits of not letting your insurance lapse should be clear. Accidents do happen, and it’s important to protect yourself financially. If you’re worried about your policy, talk to your local Bearingstar agent about payment options, discounts, and coverage options. It’s always better to be prepared, and Bearingstar’s got your back.

Do you have the right insurance coverage to get you through all of life’s ups and downs? At Bearingstar Insurance, we know that you’ve worked hard for all that you’ve accomplished, and we are here to make sure it’s all protected. With offices throughout Massachusetts and Connecticut, it’s easy to find a local agent to help with your insurance needs!