August 8, 2011

Finding New Auto Insurance Coverage When Your Policy Has Lapsed

When auto insurance coverage is allowed to lapse, finding a new auto insurance policy is not always easy. With the lapsing of coverage comes a label that marks the driver as high-risk, regardless of the driving record. One can expect their premiums to match their new high-risk reputation.

The first thing to do if a policy is canceled is to call the insurance provider. Regardless of any claims on the paperwork, some rules are chiseled in stone and others are not. If the cancellation came with a notice saying that business with them is done, it doesn't mean this is the final answer. Often paperwork such as this comes with pre-printed material, and the only thing that changes from customer to customer is the name, policy number and price. This means, with an otherwise good record, one may actually stand a shot at staying a customer.

Finding a new auto insurance policy after coverage has lapsed involves some effort in order to get the best deal possible. It is important not to make two very crucial mistakes. The first of those mistakes is not staying off the road until the issue is cleared up. This is never an easy task, however it is essential to setting things straight. Any damage already done will be tenfold if caught driving uninsured or even worse, in an accident. This is a fool's gamble. It is necessary to come up with an alternate transportation plan in the meantime.

Another important mistake to avoid is being under-covered due to allowances for the new price tag. If there is room for allowances, then of course it makes sense, but often people desperate to lower their premiums, make a bet against misfortune. Ironically those who bet against it, often find out the hard way that bad luck usually wins.

Whether staying with the old provider or finding a new one, the bottom line is that a lapsed auto insurance policy will absolutely drive the cost of premiums up. Mistakes made with auto insurance always name the price of future coverage. However, in all the bad news, also hides some good news.

The high-price jump to the premiums also marks an incentive as profit to providers, which means there will be plenty of choice for providers. Someone's misfortune is someone else's profit; it's simply the way of the world. Having to pay the high prices might not be good, but having the option to legally drive after burning a very important bridge comes with trade-offs.

However serious the issue of losing auto insurance coverage, it is unfortunately not uncommon. There are plenty of ways to fix this problem that people face every day.