A gap in auto insurance coverage reflects badly on your insurance history. Your coverage rates are likely to rise the next time you want to buy coverage after a lapse. Understand how gaps in coverage arise so that you can avoid them.
How Coverage Gaps Arise
If you are not careful, a gap in coverage may appear when you least expect it. Some people also choose no coverage while others want coverage but are unable to have it. Here are some of the ways many people find themselves without auto insurance coverage.
Payment Delays and Inadequate Finances
Lack of finances or forgetfulness may cause you to miss your premium payment deadlines. Your auto insurance company may give you a grace period within which to settle your dues if you are late with your payments. If you don’t pay within the grace period, the insurance carrier will notify you of its intention to cancel your coverage and then cancel your coverage.
Auto insurance companies have terms and conditions that their clients must follow to the letter. Your carrier may cancel your policy and leave you without coverage if you commit a serious policy violation.
For example, your carrier may cancel your coverage if they discover that you lied on your application documents.
Inability to Drive
Some people let their coverage lapse if they are not able to drive. A serious illness or an accident, for example, may make you medically or physically unable to drive. You may then choose not to renew your coverage if you are still unable to drive when the renewal time comes around.
You may be tempted to let your coverage lapse if you are traveling without your vehicle for some time. Maybe you have accepted a temporary job assignment overseas, or you plan to take an extended vacation.
How to Avoid Coverage Gaps
Now that you know why you shouldn’t have a gap in your auto insurance coverage, take the following measures to prevent a lapse:
Automatic or Lump-sum Payments
If you are a forgetful person, one of the best ways to avoid a lapse in coverage is to set up automatic payments. An automatic payment agreement with your carrier permits your carrier to deduct the premiums automatically from your account.
Another option is to pay your premiums upfront as a lump sum so that you don’t miss a payment.
Buy Non-owner Car Insurance
You don’t have to forgo auto insurance coverage if you don’t have a car or you can’t drive. You also don’t have to pay the full rates if you don’t have a car. Instead, buy non-owner car insurance, which is relatively inexpensive; it covers you for occasional driving and helps you avoid a gap in coverage.
Avoid Policy Violations
Be honest with your insurer, know your policy’s terms and conditions, and follow your carrier’s regulations to the letter.
For example, don’t say you are married if you are single, and don’t claim there are only two people in your household if you are married and have a teenage driver in the house.
If money is the issue, then you should look for affordable coverage; don’t forgo coverage altogether. Here are a few tips to secure you affordable coverage:
- Buy minimum coverage
- Buy only the mandatory liability coverage
- Increase your deductible
- Ask for all the discounts you can get Get quotes from multiple carriers
In the long run, affordable coverage is better than no coverage at all.
Don’t let a gap in coverage ruin your insurance history. Talk to Family Insurance Centers for all your auto insurance needs. We will help you buy the most suitable coverage for your circumstances.