What do I do if my car insurance has lapsed?

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Here's what you need to know...

  • If you allow your car insurance coverage to lapse, you will have a difficult time finding coverage
  • Since you will most likely be considered a risk, your insurance premium will be high
  • Check with your insurance company to see how you can maintain insurance coverage on a car you are not using
  • Insurance companies notify your state of any cancellations in your policy

You can get car insurance after a prolonged lapsed period. However, you are going to spend a lot of money on your new insurance, and you may have a hard time finding an insurance company that will insure you.

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Although every state varies in its required coverage, you will still encounter problems if you let your insurance coverage lapse.

Does the state mandate maintaining car insurance?


First, most states require you maintain car insurance regardless of whether you drive the car.

As long as you have registered a car with a tag, you will have to keep car insurance current. Although many states allow you to maintain storage coverage for cars that are not driven, you still have to maintain some kind of car insurance on the car.

The requirement for coverage varies depending on the state.

You can review your state’s requirement by looking on your state’s Department of Motor Vehicles website or a site like Edgar Snyder & Associates, which lists car and motorcycle insurance laws.

What can the state do if I cancel my car insurance coverage?

Depending on the state in which you reside, the ramifications of not having car insurance will vary.

For instance, some states will fine you a lump sum for not having insurance whereas other states will fine you on a per-day basis for all the days you skip having coverage.

You also run the risk of having your license suspended if you do not maintain car insurance. In addition to a suspended license, you will have to pay fees to have your license reinstated. You may also have to appear in court to prove you finally have insurance coverage and pay court costs. Last, you run the risk of going to jail.

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How will the state find out if I canceled my car insurance?

The state will find out if you canceled your car insurance from your car insurance company. Insurance companies are required by law to notify the state of any insurance cancellations.

Also, if your car is financed, the insurance company will notify the bank or finance company that finances the car loan.

The bank or finance company will add a premium to your monthly loan payment to ensure that they are covered should something happen to the car.

Will I pay higher premiums if my coverage lapses?

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You will pay higher premiums if you allow your insurance to lapse. If you do not have insurance for a period, the insurance company will consider you a risk.

The insurance company does not know why you allowed your insurance to lapse.

For instance, maybe you could not pay your insurance premiums, or maybe you were fixing a car due to an accident that occurred and was not reported.

Regardless of why you did not pay your insurance policy, the insurance companies will consider you a high risk.

Not only will you pay higher premiums, but you may have a hard time getting insurance. You may be forced to get insurance through a high-risk insurance agency, which is going to be more expensive.

What is the minimum car insurance for a car that’s not being driven?

Although each state differs in the minimum required by law on car insurance, you would be wise to at least keep comprehensive insurance on your car. This coverage would protect the car in case it got stolen or damaged by fire, water, or vandalism.

Ask your insurance company what the minimums are that you can keep on your car while not driving it or until you can afford to increase the coverage.

It is better to have anything rather than nothing on your car as far as insurance coverage goes.

What happens if my car insurance isn’t current?

Well, it all depends on where you live. For instance, if you live in Dallas, Texas, cars can be impounded if there is no current car insurance on the car.

Getting a car out of the impound lot can be time-consuming and costly.

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