If you don't pay your monthly auto insurance payment, your provider will cancel your insurance policy and notify your state motor vehicle department of the lapse. To reinstate your policy, you must pay your past-due amount in addition to any fees charged by your provider. You might save money by purchasing a policy through a different provider instead.
Reinstatement
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Contact your insurance company to find out if it will allow you to reinstate your policy. If you've waited too long, usually past 30 days, you must purchase a new policy instead. Expect to pay fees for reinstatement, which may increase each day of the lapse. Some insurance companies charge penalties in addition to the past-due payments, while others may require the entire policy premium upfront. Discuss your options with your insurance provider and reinstate your policy if you can afford to do so.
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State Notification
Once your insurance coverage lapses, your insurance company must notify your state motor vehicle department. Most states use an electronic notification system, meaning the cancellation information is immediately reported to the state. Expect to receive notice from your state's motor vehicle department requesting proof of insurance coverage. You don't have to use the same insurance company to obtain a policy but must purchase liability coverage that meets your state's required limits.
Another Option
If the fees for reinstatement are unaffordable, purchase from another insurance provider. Contact other insurance companies to obtain quotes for at least a liability policy. Most lending and leasing companies require full coverage insurance, so be sure to abide by your contract if you're currently leasing or financing your car. Once you purchase a policy, submit proof of insurance to your state's motor vehicle department. If you live with another person or your family, ask someone in your household to add you to his policy to avoid higher payments or penalty fees.
Penalties
Depending on the time frame of your lapse, you might find it difficult to obtain another insurance policy. Many insurance companies determine risk by using the amount of time you've been continuously insured. If you are uninsured and don't return your license plates to your motor vehicle department, you might pay additional fees. Some states charge fines and some issue a license suspension equal to the amount of time you've been uninsured without returning your license plates. Lenders may have the right to repossess your vehicle if full-coverage insurance is required and your insurance isn't reinstated or you don't sign on with another provider.