-By Solo Insurance^®

“Why not let my car insurance lapse?” thought the driver, “I can reinstate it later.” Unfortunately, this was the week before he had the accident. He made it a few days without mishap till that sad morning when he rear-ended someone (of course, it was a new luxury car!). This sad scenario actually does happen. It may be tempting to consider letting your auto insurance lapse, especially if money is tight. However, it can end up costing more in the long run. In addition, non-monetary costs play a role. These could include higher stress levels as the other cars swerve into your lane, possible driver license suspensions, potential attorney fees.  Poof! Overall peace of mind is suddenly gone.

Here we’ll look at auto insurance lapse consequences. What possible repercussions should you consider? Does the short term monetary reason outweigh them? It could come down to more month than money so, it’s for the individual to examine. There are downsides of letting your auto insurance lapse. Many of them could have serious consequences.

But I can reinstate my auto policy, right?

Not necessarily.  Not all companies offer reinstatements for every situation. You may be past the reinstatement time frame too. If the company does allow the reinstatement, fees are typically involved. Plus, by letting your vehicle insurance go (or lapse) you are losing or decreasing your largest discount, your continuous prior insurance discount.

There are also consequences for those caught driving without auto insurance imposed by your state. These can be monetary or require special filings, such as SR22. So, let’s review three reasons to keep your insurance.

 3 Reasons You Shouldn’t Let Your Auto Insurance Lapse

1.  Car insurance keeps you legal

When you own a vehicle, maintaining the minimum auto insurance is a requirement by most states. Liability insurance is necessary to help cover any damage you cause if you’re in a car crash, that’s why it keeps you legal.

In addition, if you are driving without at least the minimum coverage, you are prone to getting a ticket if pulled over by an officer of the law. Then you can add to the cost of the ticket things like court costs, time away from work, potential attorney fees and state fees. Plus, you’ll have aggravation, headache and time lost taking care of it. In the end, a lapse in your insurance coverage could make your financial situation worse.  Habitual offenders can even earn their way to suspensions and worse.

2.  Car insurance helps protect you in the event of a wreck

Statistically, there are more distracted drivers on the road than ever before. People are driving and responding to text messages, having phone conversations, or changing the radio station. All are behaviors that prevent them from focusing their attention on the road. At any moment, a distracted driver can swerve or crash into you. If you’re a distracted driver, you could crash into someone else.

If a wreck happens while you don’t have auto insurance, then you are responsible for paying for repairs (even if it takes years). Plus, if you do cause an incident during a lapse in coverage, your insurance company is under no obligation to cover the damage. It’s all on you. You would be responsible for paying to repair the damage, vehicle and/or human.  This can easily run up to cost thousands of dollars, which could bankrupt many drivers.

3.  Your Finance Company Requires Auto Insurance

If you financed your vehicle purchase, instead of paying cash for it, your loan or lease agreement typically requires you to maintain physical damage coverage until the terms are completed. Slang for physical damage is “full coverage” which includes at least liability, collision, and comprehensive insurance coverage. These coverages protect both you and your finance company from potential losses. If you are in a wreck, the physical damage coverage helps you get your car repaired or replaced. Without it, you still owe the  payments until the vehicle is paid off whether it’s drivable or not.

The key takeaway

To summarize: driving without car insurance can end up costing you more money, potentially a lot more. Before letting your car insurance lapse, it’s better to have a discussion with your agent, or call us, to figure out if there is anything you can do to reduce your current costs. Don’t let your policy cancel before you know.

Whether you have insurance now or never have, click below or call Solo Insurance® today for a free and no obligation car insurance quote.

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