If you own a vehicle, it is important to have auto insurance. Depending on where you live, it may actually be required. Unfortunately, if you have suffered a lapse in auto coverage, you will suffer the consequences when you go to purchase a new policy. Insurance companies consider coverage lapses to be risky behavior, resulting in higher premium rates. Keep reading to learn more about how a lapse in auto insurance coverage and impact you and what steps you can do to prevent it from happening.

How Does a Lapse in Coverage Occur?

There are many instances in which a lapse in auto insurance coverage can occur. For instance, you forgot to pay your bill or pay your bill too late. It can also occur if you failed to renew your insurance policy or canceled your policy because you moved overseas. A lapse may occur if your insurance company canceled your policy as a result of an excess of tickets, accidents, or claims.

How Does a Lapse in Coverage Impact You?

There are a number of consequences for experiencing a lapse in auto insurance coverage. For starters, you are likely to experience a rate increase. When you are quoted for insurance, your insurance history is one of the many factors that are considered to determine your rate. A continuous insurance record will garner you a better rate than if you have a lapse in coverage.  

If you get into an accident without insurance, you are facing legal action. You are likely to also have your license suspended, not to mention the fees that you may be fined. Further, if you are leasing or financing a vehicle and fail to maintain full coverage insurance on it, the lender could repossess your vehicle.

How Do You Prevent a Lapse in Coverage?

The good news is that there are many ways in which you can prevent having a lapse in your auto insurance. For instance, if you have recently sold a vehicle and have no intention of buying a new one right now, you may seek out a family member to have them add you as a driver on their policy. This will ensure that you have continuous coverage.

If you have a vehicle that cannot be driven, it is still a good idea to keep insurance on it. Rather than removing insurance altogether, simply reduce its coverage to a minimum.

For more information about personal auto insurance, contact a local insurance agent.