If you have forgotten to renew your car insurance policy or you deliberately let it expire, you might want to reinstate your car insurance as soon as possible. Policy lapse could be a result of different scenarios.
Common Reasons for Lapse of Policy
Policy cancellation can result from the premature termination of an insurance contract by either the insurer or the insured. The insurer has a binding period of 60 days to access your vehicle for damages and can cancel your policy based on their observations. In such a situation, the insurer will give you 10 to 30 days prior notice, along with the reason of cancellation. If you have missed a payment causing a lapse of your auto policy, you can easily reinstate your policy within 30 days of non-payment.
What is the reinstatement of car insurance?
Reinstatement of lapsed auto insurance means restoring the previously lapsed policy to its full effect. Immediately after the cancellation of a policy, reinstatement of the same can take full effect to cover the lapse in coverage. Most companies allow reinstatements within 30 days of lapse of the previous policy.
Why you should reinstate your lapsed policy?
Canceled or lapsed auto insurance renders you and your automobile vulnerable to heavy losses. It is not wise to drive around in a vehicle that is uninsured. In the event of an accident, you will be thrust with complete liability for any losses. Your responsibility shall include loss of life, property, and vehicle. Not only does this make you legally liable for the unforeseen event but it also means that you incur any and all expenses resulting from such an accident.
If you get pulled over by an official while driving with lapsed auto insurance, you can be billed with a heavy fine as defined by various state laws. The longer your lapse of coverage, the higher are your chances of getting labeled as a “high-risk driver.” This label can cause issues when you purchase new car insurance and can even nearly double your insurance charges.
How to reinstate your lapsed car insurance?
1.Lapsed due to non-payment or failure to renew a policy
Reinstatement of car policies is generally allowed by most companies within the timeframe of 30 days of cancellation or lapse. The coverage lapse time and general guidelines for reinstatement might differ according to state laws. For reinstatement of auto insurance in Buena Park, you can simply call your agent and put in a request for the same. Your insurer will ask for a signed copy of a statement of no loss incurred during the lapsed period. There might even be a nominal fee charged for reinstatement of policy.
If your insurance got canceled, you will be given a notice with the reason of cancellation prior to the lapse. You can ask for this canceled policy to be reinstated after fulfilling the required condition of the insuring company. If your policy is not sanctioned for reinstatement, you can file for a new one with a different insurer.
3.Voids in coverage
Your insurer will calculate your rates based on the years of regular coverage. If you have lost or sold the only car you had, you automatically fall out of coverage and lose all goodwill. This might even land you in the high-risk drivers’ list, further complicating things for you in the future. During this time, ask to be put on a family member’s or friend’s insurance policy to avoid voids in coverage.