Billie J. Minton Insurance Agency, LLC
An Independent Franchise 

Tel: 423-723-2244    Fax: 423-378-6333

Lapse in Insurance

An auto insurance lapse is something you want to avoid at all costs. A simple lapse in the term of your auto insurance can mean some pretty drastic consequences in terms of accident claims and much more. A definition of an auto insurance lapse can help drivers understand how important this is.

Types of Auto Insurance Lapse Situations

There are several different kinds of scenarios where drivers have a lapse in auto coverage. One is when the driver chooses to stop paying insurance, and leaves the car in a safe place without driving it. A more dangerous kind of auto insurance lapse is when a driver may not know that the insurance has lapsed because of missed premiums or other considerations. In these cases, the driver may be on the road illegally.

Consequences of an Auto Insurance Lapse

Because an auto insurance company wants to keep its lapse ratio (percentage of policies issued that lapse over time) low, there are some heavy penalties for an auto insurance lapse. The company may or may not have a penalty phase; they may just drop your policy the day after a payment is not made. The company might charge extremely high "rejoining fees" to those who have missed a premium payment. They also may deny coverage entirely after a lapse. Other companies may have similar policies, and a driver with an auto insurance lapse may find it very hard to get any kind of coverage. In the meantime, it's illegal to drive a car even one mile without the minimum liability insurance mandated by the driver's state.

Avoid all of these complications by always knowing how much time is left on your auto insurance policy, and by always paying your premiums on time
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