Kip Tips


How to Renew Lapsed Auto Insurance

Jessica L. Anderson

Look into state laws that might protect you against a rate hike, and shop for coverage through an independent insurance agent.



Going even one day without auto insurance coverage can lead to higher rates. After 30 days, you’re deemed to have “no prior insurance,” which can sometimes cause rates to skyrocket to twice as much as you paid before.

DOWNLOAD: The Kip Tips iPad App

Don’t accept higher rates lying down, says Jim Fults, vice-president of product management for Fireman’s Fund Insurance Co. Many states have laws to protect certain groups against rate increases if they have a lapse in coverage -- for example, if you’re in the military and stationed overseas, or you have been in the hospital for an extended period.

Whether you fall into such a protected group or simply gave up driving while living in the big city or abroad, your best bet is to shop for a policy through an independent insurance agent. Internet quote serv­ices, such as InsWeb.com, don’t give you a place to explain a lapse, so they pull computer-generated rates that just note that you had one. You can find an independent agent.

Advertisement

If you get stuck paying higher rates, it should be for six months, tops. After that, carriers should give you credit for previous insurance -- and the discounts that go with it -- so shop around again when it’s time to renew.

This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.


Editor's Picks From Kiplinger


You can get valuable updates like Kip Tips from Kiplinger sent directly to your e-mail. Simply enter your e-mail address and click "sign up."

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement

Market Update

Advertisement

Featured Videos From Kiplinger