What Happens If You Can't Afford to Or Don’t Pay Your Car Insurance?
Every person who owns or drives a vehicle whether it is a standard vehicle, or an exotic car has to have car insurance. Car insurance coverage can protect you, any damage to your vehicle like vandalism, theft or weather-related accidents as well as other people's cars. Having car insurance is a great idea but what happens if you miss a payment or life gets a little hectic and your insurance coverages lapses or gets canceled?
Insurance companies know that sometimes life really does get in the way and people cannot afford to pay on time or at all, but this creates a situation. Does the insurance company still pay for damages or accidents that happen when your insurance has lapsed? How do they actually deal with situations like this? How do you deal with situations like this?
What Can I Do If I Miss A Car Insurance Payment or Can’t Afford to Pay?
Unlike actual people, auto insurance companies cannot be as flexible as most would like when it comes to real-life situations. They run a business after all, and they have a strict guideline that they have to follow. This means that your personal issues, regardless of sincerity, can often not be taken into account because their hands are tied. If you cannot make the minimum monthly payment on your auto insurance, it means that your policy has lapsed and will most likely be canceled the same day. When your policy is canceled you are no longer protected under that policy and you are considered an uninsured driver until you get your policy back up to date.
Unlike registration, car insurance can get you heftier consequences if you are caught without it. On average, not having up to date registration if you are pulled over can result in a minor ticket. If you are caught as an uninsured driver while out then you could get a major fine or your car could be towed and impounded, in some cases all of the above. While it is never a good idea to drive without up to date registration or car insurance, one can be on average worse than the other. If you were to get into an accident, whether it was your fault or not, without car insurance then you could also have to pay all the fees and expenses out of pocket which could range from a few hundred dollars to thousands of dollars.
If you miss a payment with other types of insurance they sometimes offer you a grace period, this is a period of time before your policy is canceled where you can figure out how to make the payment so you are not late or go into cancellation. With car insurance there is generally no grace period to speak of. Once you miss that payment all coverage on you and your vehicle cease to exist and you are left uninsured.
If your car insurance has lapsed the best thing to do is to get your car off the road and keep it off the road. This means completely off the road. If you do not have car insurance, then in most places you cannot park your car on public streets. The best place to keep your car would be your own driveway or the driveway of a friend or family member or keep it in the garage.
There are a few things that can happen once your car insurance has lapsed. Two of the most severe would be that you receive a ticket from your local police department and the DMV that your car is registered through can suspend your license until your car insurance is back up to date. Neither of those would be ideal situations to be in. Sometimes you can avoid these penalties by going to your local DMV and turning in your license plates and registration until you are covered once again by car insurance.
What Happened After You Miss A Payment or Your Insurance Is Cancelled?
First, if there is no grace period with your policy is canceled. You are no longer covered and should get your car off the street and see if there is a way that you can avoid penalties until you can pay the insurance again.
The next step would be to try and get your insurance “turned back on”. This means to reinstate your policy so you can safely drive your vehicle without breaking any laws. The issue here is that once you go to turn your policy back on you may find that your monthly premiums are now more expensive. This is because insurance companies may now see you as a risk to their investment. They take into account all thigs to see your risk to them and that includes if you can pay your bills on time.
If you have decided that you cannot afford your old policy or to stay with the same company don’t be afraid to shop around. Looking for a new company may give you a fresh start.
Before any of this happens or you find yourself coming upon hard times a good option would be to drop some, not all coverage. There are minimums that you must have covered by the state. Check out what the minimum policy is and see where you can cut some costs to afford it easier. This can help you never to lapse your insurance and you can fluctuate and go back and forth. It may be a little more work, but it is better than completely losing all coverage and not being able to drive your car.
Another option is to raise your deductibles. This means that you pay more out of pocket if something goes wrong, but your premium rates will drop. By raising your deductibles, you are promising the company that you are going to pay more in case of the emergency so they can charge less for what they will pay later.