Lapse in auto insurance? Bad thing?

Question

Guys,

Here is my story...I got into an auto accident back in 12/2006. We are still in process, but it looks like its my fault.

My vehicle was a total loss (worth only about 6k) and I have completed my rental limit. So at this current moment, I have don't a vehicle and I don't have a rental car. My policy is still in effect though.

However, I am driving my brother in law's car (which I live with) to work. Can I cancel my own policy? I was going to do that, but the insurance rep. mentioned that if I do I will have a "lapse" in coverage and that it may make it difficult for me to get insurance in the future. What should I do? I am confused...thanks in advance guys!

I love this site! Go Yahoo!!!

Answer 1

You can cancel your policy. But do make sure that your BIL has insurance on his car!

Having a lapse in insurance will only hurt you IF you have a vehicle that requires insurance. Cancelling your policy because you don't currently own a vehicle won't blacklist you for "lapsed" insurance. Your insurance rep is blowing smoke. I'd be looking for another one.

When you do get a new vehicle and get insurance, if you are asked why there is a gap in your insurance, your answer is, "Because I didn't own a car to insure."

Answer 2

Insurance goes with the vehicle, not with the driver, so if you are driving your brother-in-law's car with his permission, you're covered.

One of the questions you are asked when you go to get insurance is "Are you currently covered?" If yes, no problem. If no, there can be a problem where you would start over at possibly higher rates, unless there was a good reason for not having it. I would guess that not having a car would be a pretty good reason for not having insurance.

How long will it be before you have a car of your own? If it's just a short time, I would probably leave it be and avoid any confusion. If it will be over 6 months, I'd cancel and explain why when the time comes to start it again.

Answer 3

I would advise you to keep the policy current for the time being, and then simply cancel the policy retroactively when you know the answer to your vehicle sitation for sure. I have changed insurance companies a number of times in my 17 years of driving and one thing I've learned is that it's against the law for insurance companies to offer you coverage on a vehicle in which you don't have a vested interest. This means that at any time during your policy, you can cancel the policy and back date the cancellation to whatever date you discontinued driving or terminated ownership of your car, and they will have to refund your money. Even if you continue paying for a long period of time, if it turns out your ownership was terminated in December 2006, they have to refund your money back to that date. Otherwise, they were insuring you on a 'ghost' vehicle that you had no vested interest in, which is against the rules.

It only makes sense that insurance companies are not allowed to bill you for a car that is no longer in service. Otherwise, they would keep billing people and make all kinds of profit from people who forgot to cancel thier policy or are just naive. I once had an insurance company bill me automatically for 3 years past the date I sold my car. I thought I had cancelled, but I was so busy I didn't notice. I got a HUGE refund with no hassle whatsoever. They were horrified that it had happened because they can be accused of fraud for letting that go on.

Answer 4

a lapse in coverage is like never having insurance at all. you may have been insured for 30 years, if you let it lapse, those 30 years don't really matter.

personally, i think its bull. just another scam to get money. if you have no car, why should you have car insurance?

i would say, cancel the insurance, turn in the plates to the DMV and move on with your life.

Answer 5

Read your insurance policy to see if the company goes into details. Lapsing isn't bad, they just want to keep getting your money. They are concerned about the outcome of the accident to see if they will have to pay, about 78% of insurance is a rip-off. If all else fails, get free consultation with attorneys who say they specialize in suing insurance companies, try more than one lawyer.

Answer 6

Correct, it's not your fault the website was down. It's your fault that you waited until the last second to pay the bill. Regarding whether or not he gets cancelled, it will depend on if this was a CANCELLATION date, or a DUE date. Regarding fair - well, I disagree. You don't get something you didn't pay for. But the EASY way to fix this, is to set it up on automatic payments. I think it's not a wise financial move, however, for you to be borrowing money (which is what a credit card is) at an astronomical rate of interest, to pay for someone else's car insurance, and you're not even married to him.

Answer 7

If you go without insurance for more than 30 days you may get denied new insurance coverage or pay a higher premium than you would if you didn't have a lapse in coverage.

Answer 8

You can always cancel your policy at anytime with any insurance company. The only reason they said that is because they dont want to lose your business. The only down side is if you do cancel, and you ever want to go back to that company your rates might go up.. Another option would be to tell them to suspend your coverage until you get another veh. That way your rates will stay the same.

Answer 9

Keep the insurance in place. It is better to be safe at having coverage than to be sorry if you do not have it.

Answer 10

NO I WORK FOR THE DEPT OF REVENUE AND WE WILL AND CAN SUSPEND YOUR LIC, FOR UP TO A YEAR AND MAKE YOU GET AN SR22