What Happens if Your Car Insurance Lapses and You Have an Accident?
If you have the misfortune of getting into a car accident during an insurance lapse, you must act quickly to handle the situation. Here’s what you need to do.
What if you have an accident while your insurance has lapsed?
If you get into an accident without having car insurance and are determined to be the at-fault driver for the incident, you will be held legally responsible for all damages and must pay all costs with your own personal assets. This includes the cost of damage to your vehicle, the other party’s vehicle, and medical expenses for anyone involved in the incident.
As you can imagine, having to pay all of these costs out-of-pocket is not a very favorable financial outcome, which is why it is always in your best interest to retain an active car insurance policy that includes collision coverage.
In the event that the other driver is at fault for the incident, you will not necessarily be required to pay for the cost of damages (as they will be paid out by the other party’s insurance provider) but you will certainly be penalized for driving without insurance, which can result in license suspension in some cases.
If you have the means, you should consider hiring an attorney to represent you in this case because they will be the most equipped to help you handle the situation and determine who is at fault in the accident so that you do not have to take full financial responsibility for the event, something your insurance provider would normally do.
In many cases where the fault is unclear, car owners without insurance are left to pay the brunt of the damages, so be sure that you fully document the accident to help build a case that serves your best interests.
Can you get a new coverage plan after an insurance lapse and a crash?
While you should always be able to get car insurance, even if you don’t have many options to choose from, purchasing car insurance after a lapse in insurance followed by a crash will certainly result in higher rates across the board. Both a lapse in insurance and an accident are serious red flags to insurance providers, so handling both in a limited span of time is a double whammy that flags you as a high-risk insurance candidate, which will severely influence your insurance options.
In fact, most major insurance providers utilize similar guidelines to determine whether you’re eligible for insurance, so if you’ve been deemed ineligible for one, don’t be surprised if you are rejected by them all.
If you can’t find an affordable plan from a major provider, you can look into providers that specialize in high-risk clients, whether state-appointed or third-party, and see where you will receive the best deal.
After retaining this new policy for at least six months to a year, and maintaining a stellar driving record in the interim, you can begin shopping for new insurance plans from major providers and with reduced rates once again.