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UPDATED: Mar 13, 2020
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If you need to buy new car insurance after a gap in coverage rest assured that it’s entirely possible. The only question that remains is how much it will cost you. Depending on the reason for your gap in coverage, you may find that your rates are higher and the number of car insurance companies willing to write a policy are fewer.
Gaps in coverage most often occur when an individual sells or scraps a vehicle and doesn’t replace it right away. This reasonable gap should not affect your future coverage. Other gaps may occur as the result of registration suspension, license revocation, dropped coverage. All of these prove to be more difficult factors when trying to buy new car insurance.
What should I do if I sell or dispose of my car?
To avoid a rate increase because of an insurance gap related to sale or disposal of your vehicle, there are a couple of things you can do. First, inform your insurance company in writing when you cancel your current policy. Tell them that you have sold or disposed of the vehicle and are not planning to buy a new one right away. This lets them know that your issue has nothing to do with a problem with your license, registration or an inability to pay.
Next, when you’re ready to buy new insurance make sure you go back to that original company, even if you don’t plan to stick with them. By going back to the same company, you are able to rely on your history and remind them of your previous communications. They can look up any correspondence in their records to find out that your previous cancellation was legitimate.
What if my insurance gap was due to suspension or revocation of my license?
A license suspension or revocation is perhaps the worst-case scenario when it comes to insurance gaps. You could write all the letters you wanted, it won’t change the fact that the suspension or revocation is part of your driving record in the future. When you try to purchase a new policy, your car insurance company will take into consideration your suspension and revocation as well as the gap that resulted from it. You will, at the very least, see higher rates for your new policy.
If your suspension or revocation is in any way tied to a serious offense such as DWI, you will most likely be put in a high-risk pool to start with. How long you remain in that pool depends on the policies of your insurance company. Regardless, while you’re in the high-risk pool you will pay premiums that are significantly higher than what you paid before. Drivers in high-risk pools pay some of the highest premiums in the country.
What do I do if my former car insurance company won’t take me back?
It is not uncommon for an auto insurance company to refuse to write a new policy after a gap in coverage. They have every right to do so according to the law. If you parted ways on poor terms, or your gap is the result of a serious offense, you may find that your former insurance company will not take you back and others are even unwilling to write you a policy.
If this happens to you, there are specialty car insurance companies who specialize in high-risk drivers such as Th General Auto Insurance or The Cure Auto Insurance companies. Bear in mind that you will be in the company of other high-risk drivers if you purchase your insurance through one of these outfits. You can expect high premiums, very strict terms, and very few extra customer perks.
Furthermore, if you’re forced into purchasing high risk insurance you may be required to pay for the entire policy up front. If you can find a company willing to let you pay on an installment plan, be very careful that you do not miss any payments. Generally you will be shown no mercy and your policy will be canceled as of midnight on your payment due date. As unpleasant as this may sound, it is one of the few ways these specialist insurance companies have of protecting themselves.
When I purchase new insurance, will the agent ask me about the gap?
Rest assured the insurance company representative will ask you when you last had car insurance and why you had a gap. In such a case, remember that honesty is the best policy. Always be forthright and tell the truth even if it means you have to reveal a DUI conviction, cancellation for lack of payment or suspension of your license. The insurance company is going to find out about such things anyway; being dishonest will only give them further reason to charge you higher rates or deny your coverage.
Gaps in car insurance should not be a big deal for most people if they are the result of simply deciding not to replace an old car. However, when insurance cancellations are forced upon you, due to your conduct as a driver, finding new insurance afterward can be difficult. To avoid all the potential pitfalls of such a circumstance just practice safe and legal driving at all times, and pay your bills on time.