Reasons You Should Not Let Your Car Insurance Lapse
If you can't pay your car insurance bill or you won't be needing insurance for a while, that doesn't mean you should just avoid paying the bill and let it lapse. Not only does this leave you without car insurance, but it could create other risks as well. Here are some reasons you shouldn't let your auto insurance policy lapse.
There Are Consequences For Driving Without Insurance
The first reason to never let your car insurance lapse is the fact that if you are caught driving without car insurance, there are a lot of penalties you could face. First of all, since most states require at least liability insurance by law, you could have your driver's license or car registration suspended. This might be until you get insurance again or it could possibly be a specific period of time where you are not allowed to drive. Also expect some hefty fines if you are pulled over without car insurance. If a police officer is driving behind you, they can run your plates and find out right away if you have insurance or not. You are also at risk of having your car impounded, which then costs you even more money just to get it out.
Your Premiums May Go Up
Even if you don't drive without car insurance, letting it lapse could hurt you when you go to get insurance again. Whether you go to the same company to get the same policy back or try a brand new auto insurance policy, you can expect to pay a higher premium. Since you have a record of not paying your bill and letting your insurance lapse instead of canceling it after getting a new policy, you become a high-risk customer. This not only means paying a higher premium, but you might be required to leave a security deposit as well.
You Could Take A Hit On Your Credit Rating
Not paying your bills on time can also cause your credit score to go down. Your car insurance company likely reports to a credit bureau, which means if you fall behind on bills or let the policy lapse, your credit score will go down. This affects you when you get car insurance since companies will check your credit score, but it also affects you if you need to sign up for a credit card, buy a car, or get a mortgage loan, or if a future landlord checks your credit.
If you have questions about auto insurance or need to start a new policy, contact a company like Ahlquist Insurance.