How does a lapse in coverage affect my auto insurance policy?
When that happens, any claims you file will not be paid. What’s worse, the lapse in auto insurance coverage will become part of your driving record. And that’s not good. Your current insurer may reinstate your policy, but it may choose not to. If it does, there’s a good chance your premium will increase due to the lapse. Plus, if you had previously received a discount for having continuous coverage with that insurer, you’ll lose that discount since coverage was interrupted.
But the problems don’t stop there. Depending on your state’s laws, you could be fined for driving a registered vehicle without auto insurance coverage. In general, most states require that auto insurance for all registered vehicles be continuous.
If you know you will have trouble making your auto insurance payment, talk to an agent as soon as possible. Together you may be able to work out a different payment schedule. Rather than paying monthly, it might be easier to make an annual one-time payment or to break the premium into two payments, with one due every six months. Having payments automatically debited from your checking account might be a good option that may even entitle you to a discount for paying this way.