You have to PAY for the consequences.

Most of us know what a policy lapse or lapse in coverage means. This is a period when your policy has been temporarily terminated or canceled because you failed to pay your premium, or for some other cause. In the United States, a lapse in your auto insurance policy comes with some price. And one of those is a rate hike. Your policy premium may increase due to lapse in coverage. Also, many auto insurance companies may deny your application for a new policy. Although some companies may allow you to get one, you will probably miss the better deals due to the lapse in coverage in your previous policy. If, for instance, you were caught driving without insurance during the lapse, you may also be penalized by your state or alternatively by your insurance company.

Furthermore, if you meet with an unfortunate accident and you are at fault and there was a lapse in your insurance coverage, then you will have to personally shoulder the expenses incurred to you and the other party.

If you love your tags, do not lapse!

If you got attached to your license plate, then consider paying your premiums on time. In the United States, every state requires drivers to bear minimum levels of financial responsibility in the form of auto insurance coverage to guarantee that drivers can shoulder the finances in the event of an accident. If a person fails to comply, then the person held responsible will be given some penalties like cancellation or invalidation of tags or license plates and suspension of your registration. In North Carolina and California, for instance, the law requires the insurance company to report to the Department of Motor Vehicles (DMV) any person with a lapse in coverage. Once the DMV is informed, then the person may be penalized. However, any person with a lapsed insurance will be sent a letter first, requiring the person to reply within ten days. In the event that the person was not able to reply within the given period, then the person’s license plate will be rebuked for thirty days. To acquire the plate back, the person should then file forms and pay the necessary fees for the reacquisition of the plate.

What to do to avoid penalties.
Needless to say, you should pay your premiums on time to avoid the liabilities. In case you want to change insurance companies, do not just stop paying your premiums. Be responsible enough to advise your present insurance company. Then, follow the company’s guidelines in terminating or canceling a policy. Make sure you allot enough time for the insurance company to do the processing properly. Again, do not just stop paying haphazardly because if you do you might find a lapse in coverage in your record. With regard to your new insurance company, make sure that you know exactly when your new policy will commence. Do not terminate your existing policy unless you are sure when the new policy begins.