When disaster strikes, do not lapse!
Picture this: You are on your way to a beach in California for a relaxing vacation in your SUV. Suddenly, a truck swerved past you, you lost control and hit another passing car. Upon investigation, the case was said to be your fault. The third party is charging you for the damages. You went to your auto insurance company. However, you forgot that you have a lapse in your policy and thus cannot make a claim.
It is indeed a grave situation when you cannot make a claim, especially when you do not have enough funds to pay for the damages. A lapse in your auto insurance coverage may not cause you any trouble now but it will in the future. What does lapse in coverage mean? It means that your policy has been canceled or terminated at a certain point in time. There are many reasons why policies lapse but one of the most common is when one fails to pay the policy premium on time. The penalty for a lapse depends on state where you live, the auto insurance company where you got your policy, and the automobile you registered in. In general, a penalty will be imposed upon you by your state when you have lapse in your auto insurance policy.
People frequently ask if their insurance will lapse even if the time period they neglect to pay their premium was only a month. Once you fail to make a payment, there will automatically be a lapse in your insurance coverage. That is because auto insurance policies do not offer allowances with regard to payments. If you do not pay your premium on time, the consequence will be a cancellation for nonpayment. And even after you pay your due afterwards, there will be a lapse in coverage on your record.
Many questions arise regarding cancellation, termination, expiration and lapse in auto insurance policies. The articles linked with this will provide further clarifications regarding these terms as well as provide you with a more in-depth look at the situations when these cases arise.
Truly, a lapse in coverage is not a pretty situation and you should take good care not to get yourself entangled in such mess. It will cause you not only money but also great inconvenience as well. Although you may restore your insurance policy when you settle your accounts, you will still be penalized according to your state’s laws.