Why a Lapse in Coverage Can Have Serious Results

Letting your auto insurance policy lapse does not seem to be that serious a matter on the surface. Unfortunately, it is not only illegal to drive without insurance; it can also have much more serious consequences than a ticket for driving without insurance. A lapse in auto insurance can have far-reaching results with the potential to affect your entire life.

The Legal Aspect

All drivers are required by law to carry a minimum liability policy in order to get behind the wheel. This protects all of the drivers on the road by ensuring that in the event of an accident, the at-fault party will have insurance to pay for the damage. If you are pulled over and found to be driving without insurance, you will be given a ticket and may face even more serious legal consequences, depending on the state in which you reside.

Financial Consequences

If you are involved in an accident where you are found to be at fault, and there is no insurance to pay the damages, you will be responsible. In a serious accident with a lot of property damage and injuries, this can add up really quickly. You may not have the thousands of dollars to pay the bills, but with a judgment against you your wages can be garnished and other assets placed in danger, including your home. Not paying that insurance premium can lead to paying off a huge amount of money for the rest of your life.

Future Insurance Premiums

Some insurance companies will not take insure someone who does not have previous insurance, while others will simply charge you a higher premium. A lapse in your old policy can mean that you will no longer qualify for the rates you were getting before. You will lose discounts including longevity with your insurance company, and will be treated as a higher risk to the company. You may also have to make a new down payment or pay reinstatement fees. It can take a while to work your way back up to getting the better rates reserved for the company’s best customers. Some insurance companies may also have a limit on the number of times you can lapse before they refuse to reinstate you.

A lapse in your insurance policy can be much more costly than had you simply continued to pay your premiums. If you are having trouble paying your insurance bill, talk to your agent about ways to reduce your rates, rather than allowing a lapse to occur.

The Most Important Policy Most People Don’t Have

You know you need insurance to help protect you from the unexpected. You carry auto insurance because you acknowledge the possibility of an accident, theft, or vandalism. You carry homeowner’s insurance because you know a fire or burglary could happen to anyone. You probably have life insurance because you know that if the worst should happen, your family would need to be provided for and you realize that it could happen at any time. And yet, many people don’t carry long-term disability insurance. You know that you are at as much risk as anyone of an accident or illness sidelining you from working, so why not carry coverage to protect you from this possibility?

Another Policy?

With all of the insurance we are required by law to carry or have been told we can’t live without, it can seem like it’s just yet another policy you have to pay for and yet another premium coming out of your bank account, all based on “what if?” Long-term disability insurance is often the policy that falls through the cracks or is simply dropped because people don’t want to pay another premium.

But before you discount disability insurance, consider the reality of what would happen if you were disabled for a long period of time. Your workplace benefits probably give you a small amount of coverage, but when they run out and you still can’t work, what then? A long-term disability policy gives you extended coverage for the difficult situation of an illness or injury that you can’t simply get over in a matter of weeks. Without it, you could lose your home, your car, and your entire lifestyle, all while trying to take care of your health.

The Cost Of Long-Term Disability

If you don’t have an Long Term Disability policy because you feel the premiums are too high or not worth it, take a moment to think about what it will cost you if you do not have the policy and do become disabled. Without your salary, even with whatever benefits you have from work or other sources, your life will change completely. You won’t be able to afford the things you are used to having. Not only will you be facing the difficulty of trying to recover and take care of yourself, you will have to struggle to pay the bill and face the stress of losing things that are dear to you.

Long-term disability insurance is the one policy too many of us do not have that we absolutely need. Don’t wait until it’s too late; give us a call today at 401-433-1111.