May 15, 2020 • Car Insurance
Why do People have Lapses in their Car Insurance?
A lapse is the cessation of a privilege, right or policy due to the passage of time or inaction. When a policy lapses, it usually occurs because one party fails to act on its obligations, or one of the terms on the policy is breached; an insurance policy will lapse if the holder does not pay the premiums.
There are a number of reasons why people experience lapses in their car insurance coverage. A lapse in coverage can be intentional or accidental. The most common reasons for having a lapse in coverage include:
- You sold your car
- You missed payments and your policy was cancelled
- Your policy expired
- You stopped driving
Keep in mind that having a lapse in insurance is different than suspending your insurance coverage. For example, if you are deployed in the military or move abroad for six months, you might be able to suspend your insurance coverage and reinstate it at a later date. However, suspension usually isn’t available for leased cars.
If you’re not able to suspend your insurance while you’re away, you may have to accept a lapse in coverage.