What Happens When You Let Your Car Insurance Lapse?
Having car insurance is something that everyone is required to maintain. This helps to protect you, as a driver, from a major financial burden in the event that you are involved in an auto accident. However, when your budget gets tight it may come to your thoughts to let your insurance policy expire for a short while until you can get the funding you need. This isn’t a good idea. Let’s take a look at the top reasons why.
Your Legally Liable
Most states in the United States of America require some minimum level of auto insurance for a driver to be on the roadway. The minimum cover typically covers the cost of medical expenses and property damage that a driver incurs when they are at fault for an accident. If you let your Youi car insurance nz coverage lapse, you will be violating the State law and can receive a legal reprimand in the form of stiff fines.
In the event that you are involved in an auto accident that is your fault, you are held financially liable for the damages that you created. This means the damage to the other car, property, medical, and even their loss of income in the event the person cannot work. These are a lot of expenses to pay out of pocket. Car insurance is intended to help protect you against major financial burden, so use it too.
Impact Your Driving Record
Some states require car insurance companies to notify the Bureau of Motor Vehicles in the event a driver lets their car insurance policy lapse. These states note the lapse on a person’s driving record and can take action to suspend their driver’s license or even seize their vehicle.
Insurance Rate Increases
If you let your insurance lapse, it’s possible your rate could go up in the future. It may be a signal to some car insurance companies that you are a risky driver. These risky drivers tend to have more issues finding coverage and when they do, it typically costs a lot more than other non-risky drivers.
Not letting your car insurance lapse is extremely important as it will ensure you don’t end up in any of the adverse situations listed above. You should always prepare to pay your monthly premium on-time and never think about sacrificing your car insurance when it comes to shrinking your budget.