Managing Insurance Costs After A Lapse Or Cancellation

Recently a user on Reddit sought help because he was facing down the barrel of a $300 to $400 per month premium for full coverage. Why so high? Well, for the last two years he has been without car insurance. For the rest, we’ll let him tell it:

“I’m a 29 year old male who had his license suspended a few years back for having too many points … I currently live in CT. I’ve been without insurance for the last two years.

“I’m starting to save for a car, and also car insurance. I was doing some quotes the other day, and the amount it is going to cost me per month is INSANE ($300 – $400/mo for comp and collision). I was wondering, if I can get on someone’s policy for a short period of time while I continue to save money, would it be worth it? I can’t help but think that not having insurance for such a long time is what is costing me a nice chunk.

“I want to lower it as much as possible, while still having full coverage. Any other suggestions would be great.”

The best response to this came from a licensed P&C agent going by the handle Yamuddah.

“It is totally worth it! I tell people to do this all the time! I work for a large national company and if you don’t have 24 months of continuous auto you are put into our high risk line. Depending on record and credit that can be 2-6 times more expensive. I def[initely] recommend getting on a friend or family member’s policy for 1 year at least.”

You can check out the rest here.

Managing insurance costs after a lapse in coverage can be difficult, but you have to start somewhere. With most policies running on six-month renewals, it is well worth your time to see if you can’t talk a friend or family member into putting you on their policy for one period. That’s usually enough time to get over the drawback of not having insurance, though it may not help very much in the case above considering that the driver had too many points on his license and had it suspended.

In order to keep costs down moving forward, you’ll have to follow these steps:

  • Get insured in the cheapest way possible. Again, that could mean a friend or family member helping you out through policy inclusion. It could also mean paying more for a liability policy. Yes, it’ll be higher than if you’d never been canceled or allowed it to lapse, but it gets you in the books, and it probably won’t be the $300 – $400 number quoted in the example.
  • Keep your license and registration in good standing. The best tool you have to lower insurance costs is you. By being less of a risk — avoiding traffic accidents and moving violations — you’ll be able to see your risk factors go down over time.
  • Purchase a car based on safety standards rather than sportiness. While Americans place a great deal of prestige on the car that one drives, if you’re in the spot of managing insurance costs after a lapse or cancellation, then you should forgo temptation of “buying up.” Instead go with something sensible and commit to recreating who you are as a driver in the eyes of the insurance companies.


In Summary

A lapse or cancellation of auto insurance coverage can create unique challenges that most motorists don’t have to worry about, but with time and determination, it’s possible to lower your premiums and repair your standing. Good luck, and drive safely.

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