How Gaps in Coverage Affect Auto Insurance Rates

How gaps in coverage affect Auto Insurance rates

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It is inevitable to own a car without auto insurance. But consider a situation whereby you might not be driving your car for a while for instance if you are out of town for some study project, your car is out of order and you do not plan to fix it any soon as you are relying more on car pool for your commute.

It might seem attractive to cancel your car insurance as you won’t be using your car for some time. This can save you some amount of money. But in the long run it can have a negative impact on your credibility and payment history from the auto insurance company’s point of view.

Gaps occur not only when you cancel your insurance but also when you do not make timely payment of premiums. Apart from this, gaps might occur not only from negligence from customer’s side but sometimes the insurance company is also responsible for gaps in coverage.

For instance if the auto insurance company cancels your policy for some reason a gap in coverage may occur. Or if it goes bankrupt, out of business or simply decides to shut down its operations gaps in coverage may occur, negatively impacting the customer. So how gaps in coverage affect auto insurance rates?

If you cancel your car insurance it can save you some money. But when you apply for insurance at some later stage, the auto insurance shall review your previous record. Upon investigation, it will come to the company’s knowledge that you have cancelled insurance previously.

This can raise your rate of premium. You would probably enter the high risk pool of customers from the company’s point of view against which they charge high premium. Not only that, to be termed as a high risk driver it can be difficult for you to obtain a suitable auto insurance policy altogether. The investigation and procedure to obtain the policy can be very tedious and with lots of strings attached by the company.

Inability to obtain insurance can be very risky as driving without insurance can cause you in trouble with the law governing the state. You can face heavy fine if caught.

If caught more than once, even the driver’s license can be suspended for a while. License reinstatement can have a negative impact on your driving and personal record. Not only that, it also comes with a fee and lots of bottlenecks in the procedure.

So what to do if a gap occurs in coverage? First and foremost, you should immediately meet with your insurance company’s representative and inform him of your situation. The company can allow for a low cost renewed bond. Some companies do not consider lapse a serious one until and unless if it is for a lengthy period of time and without any notice. If the lapse occurs from the company’s end, you must change your company immediately before it negatively impacts your track record.

So gaps in coverage affect Auto Insurance Rates San Antonio negatively. It is always better to act prompt and avoid any such happening.

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