If you've decided to let your auto insurance lapse, you might want to reconsider that decision. Even being without auto insurance for a few days be lead to devastating consequences. Your auto insurance not only protects your own car, but it also protects you as well. If you haven't thought of the negative consequences that could follow if you let your auto insurance lapse, here are four of them for you to consider.
1. You'll Have a Hard Time Getting Another Policy
When you let your auto insurance lapse, you're sending a message to other insurance companies that you might not be a good risk. When that happens, you may find it hard to get another policy. If you can find another policy, you'll probably end up may considerably more for the coverage. To make sure you don't have trouble finding coverage, and to keep your premiums affordable, don't let your current policy lapse.
2. Your Driver's License May be Suspended
If your insurance lapses, the insurance company will notify the DMV in the state you live in. Once DMV is notified, they will go after you for your lack of auto insurance. At first, they may simply send you letters to remind you that auto insurance is a legal responsibility you have if you want to drive a car. However, if you don't respond, they may threaten to suspend your driver's license, revoke the registration on your car, and hit you with daily fines until you renew your auto insurance. Don't risk the legal trouble. Keep your auto insurance policy in force.
3. You Could Face Financial Liability for Accidents
If you're involved in a car accident during the time that your insurance has lapsed, you may find that you're held financially, and legally responsible for the accident – even if the accident was not your fault. Driving without proper auto insurance can leave you automatically liable for any car accidents you're involved in. Not only will you not have coverage to take care of the damage to your own car, but you'll also be financially responsible for covering any vehicle damage or medical injuries that the other party may suffer as a result of the accident.
4. Your Car Payments May Go Up Considerably
In addition to notifying the DMV, your insurance company will also notify the lien holder on your car, which will be the finance company. Once that happens, the finance company will issue their own insurance policy on your car and add the payments directly to your monthly car payments. Unfortunately, those insurance premiums could be hundreds of dollars more than your original insurance payments. You can avoid the increased car payments by maintaining your own auto insurance coverage.