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What happens after an auto insurance lapse if you switch providers, stay with them for a time, and then switch to another provider? Do you return to the previous cheaper rate because you have the more recent coverage history, or are you still screwed with the higher rate?
Or is there a certain amount of time you have to stay covered with a provider before your more recent history allows for a cheaper rate?
The answer to this question depends on the insurance carrier you are switching to. Generally speaking, most insurance carriers like to see 6+ months of continuous insurance. Others (Allstate springs to mind) want to see 12 months' worth of continuous coverage.
So, a lapse isn't the end of the world. Once you are within 60 days of your renewal, request a quote from a few of the bigger captives (State Farm, Liberty Mutual, Farmers, etc.) and contact an independent agent in your area. Make sure they are quoting you for your renewal date. The quoting software is smart enough to know that you will have had 6 months' worth of insurance by that time.
What happens after an auto insurance lapse if you switch providers, stay with them for a time, and then switch to another provider? Do you return to the previous cheaper rate because you have the more recent coverage history, or are you still screwed with the higher rate?
Or is there a certain amount of time you have to stay covered with a provider before your more recent history allows for a cheaper rate?
State and carrier determine this. There is no blanket answer.
Lapse is when you don't have an insurance, not when you switch carriers. If you aren't goign to own a car, buy a non-owners policy so that you don't have a lapse.
Lapses can happen for a variety of reasons. One of the most common reasons is that a person's car is totaled on Friday, so he cancels his insurance retroactively. Let's say, for example, that his car was in a severe collision on Wednesday night, towed to a shop and dropped off after hours, and the adjuster looked at it on Friday morning and within 5 seconds said, "Bent frame. Cracked chassis. Total loss."
So, the guy canceled his insurance retroactive to Thursday at midnight, and he buys a new car on Sunday from a dealership getting brand new insurance with a different carrier. That's a three-day lapse.
Other lapses may occur when a guy gets, from a new carrier, insurance starting on 12/2/2019 so he cancels his other insurance as of 12/1/2019. That's a one-day lapse because the guy just didn't know what he was doing.
Lapses can also occur if the guy doesn't have the money on hand to pay the premium at the time it's due. It would be impossible to enumerate all the possible reasons that a lapse might occur.
Now, in my state, insurance companies are not legally allowed to surcharge someone for a lapse if he or she can prove that he had no need for insurance. So, an astute insurance shopper could show up with the bill of sale and insurance settlement papers to document a no-need situation, but few insureds here have it that together.
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