Everything you need to know about insurance, mortgage and loans(Part 1)

Common Reasons for Lapsed Auto Insurance
I forgot to pay my bill
I don’t have the money to pay my bill
I sold my only car
My only car broke down
My only car was in an accident
Avoid a Lapse if Possible
Several of the reasons for lapse listed above may seem like legitimate reasons for canceling your auto insurance, but the consequences are severe. It can be especially dangerous if the reason for lapse is one of the first two. Forgetting to pay your bill or not having the money implies you may still be driving your vehicle. If that is the case, extremely serious problems can come up if an auto accident occurs. If you no longer have a vehicle or choose not to drive it for a period of time you will still incur penalties.

You can be held personally liable in an accident
Hefty fines if you’re caught driving without insurance
You’re considered high-risk the next time you go to purchase insurance, which can nearly double your payments
Look for ways to avoid a lapse if possible. Car insurance should be high on your priority list. Borrow money from a family member, sell some items or use a credit card to make your payment within your grace period. Reduce coverage, talk to your agentto find out ways to save on your policy, or shop for lower rates if money is the problem. If you are without a car for a period of time, see if you can be listed as a driver on a family member’s policy. If you’re transitioning between vehicles or your car is out of commission due to repairs, carry insurance on your old vehicle just until you make your new purchase or repair your vehicle.

It could save you hundreds of dollars.

What to Do if You Have a Lapse
Two options can help solve your problem quickly:

Call the company or agent you lapsed with and request for reinstatement
Ask to be listed as a driver on a family member or even a friend’s policy
If you have had a good standing with your insurance provider, for example, have never lapsed before and have not recently had multiple claims, you have a good chance of being reinstated. It is possible to incur a surcharge for lapsing; however, it will still be cheaper than going with a high-risk carrier. Being listed as a driver on a family member or friend’s policy is a great option for someone without a vehicle. As long as you are listed as a driver on an insurance policy, you will not be treated as high-risk when getting insurance in your own name.

Exceptions to the Rule
There are almost always exceptions to rules. Only a few reasons for going without insurance are allowed. And most of the exceptions come with stipulations.

Military employees
Newly licensed youth drivers
Driver maintaining continuous motorcycle insurance
Military workers have the easiest time obtaining insurance without prior coverage due to deployment or training on base. Newly licensed youth drivers can still have a difficult time finding coverage with a preferred carrier if they do not have a parental supporting policy. The only chance a motorcycle rider has is getting preapproval from their auto insurance carrier. Exceptions for motorcycle riders have come about due to the tough economy and drivers downsizing to a motorcycle; however, do not expect this one to work with every carrier.

When money is tight or you are without a vehicle, it may seem like a good idea to cancel your car insurance, but it never is. Not only is driving without insurance against the law, but it can be very costly to you and the general public. Do not forget this important rule of thumb and never let your car insurance lapse