A lapse in auto insurance coverage is a time period in which you do not have any coverage at all. A lapse can occur for a day, weeks, or even years, but allowing lapses to occur will typically cause negative effects on your ability to get car insurance and on the cost you will pay for it. Here are three top three reasons you should do all you can to avoid a lapse in your auto insurance coverage.
It puts you in a different risk category
The first reason to avoid lapses is to avoid being placed in a different risk category. All insurance companies categorize drivers in risk categories, and there are usually three categories you can fall into. The first category is the best category, and it means you are a very low-risk driver. The second category is moderate risk, which is almost as good as being a low-risk driver. The third category is high-risk, and high-risk drivers present the most risks for insurance companies.
When you allow a lapse in your policy, you will typically be placed in the high-risk category by all insurance companies, and this is something you should try preventing if possible.
High-risk drivers pay more for insurance
The problem with being considered a high-risk driver is that you will pay more for your insurance. People in the low-risk category pay the lowest rates on their insurance policies, and high-risk drivers pay the most. If you do not want to spend a lot of money on car insurance, you should try to avoid doing things that would cause insurance companies to rank you as a high-risk driver.
Some companies won't insure drivers if their insurance lapsed
You probably do not realize that some insurance companies will not even provide auto insurance to people who allowed their policies to lapse. When insurance companies see that a person allowed a lapse in coverage, it causes them to suspect problems. Because of this, you might find that very few insurance companies will even offer to insure you if you have any lapses in your coverage, but especially if you currently do not have a car insurance policy in place.
These are three of the top reasons to never allow a lapse in your auto insurance coverage. If you currently need insurance, contact services such as Lanham Insurance Agency to find out how much a policy would cost.
After I graduated college, I started to feel like an adult. I started teaching at a school. I also bought a car. And I became the owner of several insurance policies. I obtained a comprehensive insurance policy for my car. I also secured my first life insurance policy at this time. I didn’t want my family members to be burdened with funeral costs if I suddenly passed away. A few years after graduating college, I became a homeowner. After this joyous occasion, I invested in a homeowners insurance policy. On this blog, I hope you will discover the most common types of insurance people purchase.