During these tough times, many people are having to make hard choices about where their money goes. If you’ve had to hold back on your auto insurance premium you may find yourself with a cancellation notice. Usually, the situation can be fixed by talking to the company and getting the finances worked out.
However, there are other reasons why your car insurance may be canceled. The first thing to do is to figure out why. Let’s take a look at a few reasons why and how you can reinstate your canceled car insurance.
The Differences Between Lapsed, Non-Renewed, and Canceled Insurance
Lapsed Car Insurance
In the U.S., most states force you to have car insurance before you can register your car. Once your car is registered, if you then lose your car insurance it will be considered a lapse in coverage. A lapse in coverage can mean fines and penalties for you and, most importantly, it means you will pay more when you go to purchase auto insurance again.
A lapse in coverage can occur for a few reasons. For instance, perhaps you just missed your policy renewal date or maybe you missed a payment and the company suspended your coverage. These situations can be fixed, but once you have a lapse in auto insurance coverage you will see higher rates. The insurance company now sees you as more of a risk and will charge you more per month.
For this reason, you should always make every effort to avoid a lapse in coverage. It’s almost always better in the long run to keep your insurance coverage continuous.
Non-Renewed Car Insurance
Non-renewal is a different situation. Whereas a lapse in coverage usually occurs because of something you haven’t done, non-renewal means that the insurance company is the one that is not continuing the coverage. Non-renewals happen at the end of your policy term, not in the middle. The company will notify you about your non-renewal so you will have time to find other insurance coverage.
Non-renewals occur for several reasons. Sometimes it’s just a business decision by the company to no longer service your area. Other times it can be because you have become to risky for them, perhaps by filing too many claims.
Canceled Car Insurance
The most serious reason for no longer having auto insurance is a cancellation. This is when something so egregious has happened that the company drops you right away, even in the middle of a policy term. Cancellations happen because of fraud and other serious offences that are often covered by state laws.
How to Reinstate Your Cancelled Car Insurance
If your car insurance has been cancelled, you’ll want to figure out how to get it reinstated as fast as possible to avoid further legal complications.
Here are some tips for reinstating your cancelled auto insurance:
- Don’t wait. The longer you go without addressing the problem, the worse things will get
- Negotiate with the company. If you owe money, create a payment agreement with the company.
- For more serious issues, shop around
Shopping around for car insurance may be your best bet for fresh start if your car insurance has been canceled. You can use the InsuranceWins form to get fresh quotes from well-known companies. This allows you to compare rates and truly find a car insurance company that works for you!
