Failure to pay your auto insurance premiums can lead to lapsed, cancelled or even expired insurance. This is not the only time you might face an issue with your policy. If you opt to cancel one insurance policy before starting a new one, the same trouble occurs. A lapsed or cancelled insurance policy becomes a major headache.
First, many of the states within the U.S. require car owners to have auto insurance on any vehicle they own. Take Massachusetts, for example, where not having insurance will incur fines of up to $5,000 and up to a year in jail. In Texas, if you cannot offer proof of insurance when pulled over, expect a fine of $175 to $350. Even in Wisconsin where the law does not specifically state you must have insurance, you are required to offer proof that you have sufficient coverage in bonds, bank accounts or an insurance policy. Are you willing to pay thousands or go to jail in order to save a little money by skipping auto insurance?
In New York, one of twelve "no-fault" states that require car owners to pay for their own accidents regardless of who is at fault, residents must purchase their auto liability insurance from New York State. Insurance from a company outside of New York is not accepted. If you live in New York, it is critical that you make sure your liability insurance company is accepted in the state. If your insurance lapses in New York, your license and registration can be suspended.
Say you are caught without insurance once and face hefty fines, but do not have time or the money to have your auto insurance reinstated, fines continue to grow with every additional offense. In many states, you can lose your license if you continually ignore prior warnings. If you are in an accident without insurance and have had prior warnings, most judges will send you to jail on top of the fines.
If you simply forgot to pay your auto insurance premiums because of a missed bill or financial strain, which does happen, most insurance companies require you to sign paperwork stating that from the date the payment was due until the date you catch up on payments, you were not insured. Should you have had an accident or otherwise damaged your own or someone else's car in that time frame, you will be responsible to pay for all repairs or damages out of your own pocket.
Avoid problems. Make sure your auto insurance policy is up to date. Don't let your policy lapse or become cancelled for non-payment.
Authored by: Jay Newman For additional information, you can go to: http://www.lapsedautoinsurance.com/definitions.htm or http://www.lapsedautoinsurance.com/penalties.htm |
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