Driving without a valid insurance is illegal, and you will get into trouble with the police if you do so. In some cases, people decide to cancel their car insurance when they don’t use a vehicle. However, as soon as you start driving again, you need to have a valid cover. If you don’t know how to reinstate canceled auto insurance, and need to do so, here is a quick guide to help you stay legal on the road and protected in case of an accident or a collision.
Why You Need a Car Insurance
If you drive a car on public roads, you will need to have car insurance. Your state will determine what level of protection you will need, so it is always better to check. If you drive a vehicle that is not insured, you will not only get a penalty, but also have to pay out of pocket should you get into an accident or have your car damaged.
In some cases, your car insurance will lapse as you forget to renew it, and in other cases it will be canceled by you or the company. Check regularly to make sure that you never drive without a valid policy.
Why Your Car Insurance Gets Canceled
If your car insurance gets canceled, you usually get a notification from the company. The main reasons why an insurer would cancel your policy are:
- Driving offenses, such as DUI or multiple accidents
- Making too many claims
- Missing payments
- Not providing registration or other documents
- Expensive claims.
For more information on why a car insurance company would cancel your policy, check this out to find out what to do next.
It is important to know that non-payments affect your credit score and you will have a limited chance for a better deal long-term if you get your car insurance canceled due to nonpayment. Apart from penalty fees, you will also have to pay interest and reinstatement fees, so make sure you think twice before missing too many payments on your insurance.
In some cases, a car insurance company will cancel your policy when they find out that as a driver you have additional risks. The cancellation is often non-negotiable. In other cases, the company might suspect fraud, and cancel the policy. They will, however, need to give you a notice and a 30-day grace period.
What Is Car Insurance Reinstatement?
If you have a canceled policy, you can ask for the reinstatement of your policy. You can submit a request to re-establish the insurance, but there are no guarantees that the company will agree. Find out more about negotiating the terms on Insurify.
It is important to know that there is a grace period for the lapsing of car insurance, which is usually thirty days. If you are within this period, it will be easier to reinstate your insurance than if the grace period has lapsed.
Rules to Reinstating Car Insurance
if you have missed a payment, the first thing you have to do is pay the outstanding balance for the insurance company. Most companies will charge you interest on the amount, so always ask for the settlement figure before you make the transfer.
As a general rule, you cannot modify the policy while reinstating it. It can be restored with the same company based on the original terms. You cannot reinstate the policy with another company.
Many insurers will also charge you a fee for reinstating your car insurance, which is payable before the policy goes live.
Once you have a confirmation of the reinstatement, you will have to double-check that the terms are the same and make sure that it is valid on the date you are planning to use your vehicle.
If your car insurance company decides to decline your request for car insurance reinstatement, you might want to start shopping around and see if you can get a cover elsewhere. Every company determines risk levels slightly differently. What might be too risky for one company might be acceptable for another.
Reinstating Canceled Auto Insurance
If your car insurance has lapsed, you will have to stop driving your car immediately until you resolve the issue. Most companies will send you reminders before the policy would lapse, so it is crucial that you stay on top of their emails and letters. Read more about what happens when your policy lapses on our blog.
Ask the company what the terms and conditions are, and how long you have to get the policy restored. You should also be aware of the financial consequences; you might get charged interest and late fees, or your price could go up.
You should not allow your policy to get canceled more than once every 36 months. Otherwise, you will see your applications for car insurance turned down, not only by the original insurer but other companies, too.
Your credit rating is one of the main factors when insurance companies assess your application for a cover, and they share data through credit reference agencies. If you allow your policy to lapse, you are risking higher prices or rejection of car insurance coverage.
Whether or not you can reinstate the policy will depend on your policy and the company. The Policy Genius provides a few tips on reinstating your policy that might help you with the process.
It is always better to maintain good relationships with your insurance company instead of making amends after your policy is canceled.
When you find it difficult to pay your monthly fee, it is better to get in touch before your car insurance lapses. Stay in contact with the company, even if you find it hard to keep your insurance going. They will be more likely to come up with solutions to keep you as a customer than to lose you. If you can avoid getting your policy canceled, you can save a lot of money long-term.
If, however, your car insurance is lapsed, try to get it reinstated as soon as possible, at least in the first 30 days to avoid further inconvenience.
Check this out if you need additional information, resources, or guidance on car insurance.
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