U.S. Auto Association: Can You Reinstate Your Policy?

If your auto insurance policy has been cancelled, you may be able to get it reinstated by contacting your insurance provider, depending on their rules and your state's laws. Reinstating a policy is usually easier than buying a new one, as you won't have to go through the purchasing process again. However, if your policy was cancelled due to non-payment, reinstatement can be more complicated. You will need to pay any premiums you owe, as well as any interest and fees, within your insurer's grace period (usually 30 days) to be eligible for reinstatement. If you don't pay within the grace period, your policy will likely be cancelled and your insurer might decide not to reinstate it, or they may raise your rates if they do.

Contact your insurance provider

Contacting your insurance provider is the first step to reinstating a cancelled auto insurance policy. It is important to act quickly, as the reinstatement process is much simpler if your coverage hasn't lapsed yet. If you've gone too long without making your car insurance payments and you've let your policy lapse, the process is more complicated than just catching up on late payments.

Insurance companies will not cancel your policy immediately after a missed payment. Insurers are usually required by state law to notify you before a policy cancellation. Most insurance companies will offer a grace period, typically between 10 and 30 days, for you to get back on track with your payments. During this time, you might have to pay the owed premiums plus interest, depending on your insurance company.

To get your policy reinstated, you need to contact your insurance company over the phone, through their website, or via a mobile app. You might need to fill out a form or sign a "statement of no loss", which states that you did not have a loss during the grace period and will not file a claim. You may also have to pay a reinstatement fee to restore your auto insurance policy.

If your coverage has lapsed, your insurance company may not reinstate your policy. Many insurance companies will not reinstate a policy if you've passed the 30-day mark, in which case you will have to apply for a whole new policy. This means your insurance history will show a lapse in coverage, which can result in higher insurance rates in the future.

Your insurance company can reinstate your policy past the grace period, but this depends on company policy. If your insurer agrees to reinstate your policy, you will likely have to pay the premiums you owe upfront and pay a fine before they reactivate your policy. Your policy period will change to the new reinstatement start date, and all of this will show on your insurance record.

When reinstating your policy, make sure you are calling the correct phone number, as many insurance companies have different telephone lines for different purposes. Have the following key pieces of information handy:

• Your policy duration period
• Your notice of policy cancellation
• The missed payment bills
• The name of the drivers in your household

Reinstating a lapsed policy

If your auto insurance policy has lapsed, you will need to stop driving your car immediately. Driving without a valid insurance policy is illegal in nearly every state and can result in serious repercussions, including fines, suspension of your driver's license, and repossession of your vehicle.

To reinstate a lapsed policy, you must contact your insurance provider as soon as possible. The process for reinstating a policy varies depending on the company and state laws. Most insurance companies offer a grace period, typically 30 days, during which you can get your policy reinstated without a lapse in coverage. However, you may be required to pay any outstanding premiums, late fees, and interest charges. You may also need to fill out a form or sign a statement of no loss, certifying that you did not experience any losses during the grace period and will not file a claim. Some companies may also charge a reinstatement fee.

If you do not reinstate your policy within the grace period, your insurance company may decline your request for reinstatement, and you will need to apply for a new policy. This will result in a lapse in coverage, which can lead to higher insurance rates in the future. Additionally, your insurance history will show a lapse in coverage.

To avoid a lapsed policy, it is important to maintain good communication with your insurance company and stay on top of their emails and letters. If you anticipate difficulty in making a payment, contact your insurance provider to discuss your options. They may be able to offer a flexible payment plan or other solutions to keep your policy active.

Cancelling insurance due to non-payment

If you receive a notice of cancellation from your insurance provider, it is essential to act promptly. Contact your insurance company to discuss your options and try to make the payment as soon as possible. If you miss the grace period, your policy will likely be cancelled, and you will no longer be legally allowed to drive your vehicle. At this point, you have a few options:

• Reinstating your policy: Contact your insurance company to see if they are willing to reinstate your policy. They may agree to reinstate it if the lapse in coverage has been brief, usually less than 30 days, and there have been no claims or losses during that period. However, they may charge you a reinstatement fee, and your rates may increase.
• Applying for a new policy with the same insurer: If your previous company is unwilling to reinstate your policy, you can try applying for a new policy with them. However, this may be more challenging and expensive, as a lapse in coverage is considered a sign of high-risk behaviour.
• Finding a new insurer: If your previous company is unable to offer you insurance, you may need to look for another provider. This could be a standard insurer or a company that specialises in high-risk drivers. Keep in mind that rates are likely to be higher, and finding coverage may be more difficult.

It is important to remember that letting your insurance lapse can have serious consequences beyond just your insurance rates. Your driver's license and registration may be suspended, and you may face monetary penalties and legal issues if caught driving without insurance. Additionally, a lapse in coverage can impact your credit score and credit history negatively. Therefore, it is always best to maintain your insurance coverage and communicate with your insurance provider if you anticipate any payment issues.

Consequences of a lapsed policy

A lapse in auto insurance coverage means going without insurance for a period of time, typically ranging from one day to 60 days or more. This can occur due to missed premium payments or policy cancellation by the insurance company. While short lapses are relatively common, there are several consequences of a lapsed policy that you should be aware of:

Financial Risk

If you cause an accident and injure someone or damage their car during a lapse in your insurance, you will be responsible for paying for any damages or injuries out of pocket. This can result in significant financial burden and life-changing expenses. The other driver could also take legal action, leading to additional costs and future wage losses.

License Suspension or Fine

Depending on your state's regulations, the department of motor vehicles may be notified of your lack of insurance. As a result, your driver's license could be suspended, or you may be subject to fines. In some cases, you may be required to carry an SR-22 for several years, which is an additional expense on your auto policy.

Rate Increase

Even a single day without coverage can lead to higher car insurance rates. Insurance companies may view you as a high-risk driver and charge higher premiums. Starting a new policy after a lapse is usually more expensive than maintaining continuous insurance.

Repossession

If you have a leased or loaned vehicle, your lending or leasing company may repossess it if you fail to maintain the required comprehensive and collision coverage. This is often a condition of the loan or lease agreement.

Difficulty in Obtaining Future Insurance

A lapse in insurance coverage may be recorded on your insurance history, and some companies may be reluctant to offer you a new policy. Even if you are able to obtain insurance, certain companies may not sell a policy to drivers who haven't maintained continuous coverage for a certain duration. This can limit your options and make it challenging to find affordable insurance.

Legal Consequences

Driving without insurance is illegal in almost every state, and you may face penalties such as fines, impounding of your vehicle, or even the suspension of your driver's license and vehicle registration, as seen in the example of New York state.

In summary, it is crucial to maintain continuous auto insurance coverage to avoid these consequences and ensure you are protected in the event of an accident. If your policy has lapsed, take prompt action to either reinstate your previous policy or purchase a new one to minimize the potential impact on your finances, driving record, and future insurance options.

Grace periods

If you do not make your payments within the grace period, your auto insurance policy will be cancelled and you will no longer be protected. Your insurance company might decide not to reinstate your policy, and if they do, they may raise your rates.

If your coverage has lapsed, your insurance company may not reinstate your policy. Many insurance companies will not reinstate a policy if you've passed the 30-day mark, in which case you will have to apply for a new policy. This means your insurance history will show a lapse in coverage, which can lead to higher insurance rates in the future.

That being said, your insurance company can reinstate your policy past the grace period—it ultimately depends on company policy. If your insurer agrees to reinstate your policy, you will likely have to pay the premiums you owe upfront, as well as a fine, before they reactivate your policy.

Frequently asked questions