Going From One Insurer To Another? Mind The Gap

22 May 2017
 Categories: Insurance, Blog

Being loyal to your auto insurance provider has its perks, but switching to another provider offering better rates or better coverage can also be to your advantage. If you're not careful, however, making the switch could put you at risk of having a noticeable gap in your insurance coverage.

How a Gap Affects Your Policy

The last thing you want is to be without auto insurance coverage for any length of time. Unfortunately, this is exactly what could happen if you cancel your current auto insurance policy without having another policy in place. Falling into a gap in your auto insurance coverage can leave you financially vulnerable in the event of a crash. This means that any damages or injuries will come directly out of your own pocket.

Having a gap in your auto insurance coverage could also invalidate your vehicle registration, essentially making your vehicle illegal to drive on public roads. If you're caught driving without insurance, you could also end up with hundreds or even thousands of dollars in various fines and fees.

Last but not least, having a gap in your auto insurance coverage could also affect your premiums for your new coverage. It's not out of the ordinary for drivers to pay higher premiums due to a small gap in their insurance coverage history. Continuously insured drivers, on the other hand, often pay lower premiums due to their coverage history.

How to Avoid the Coverage Gap  

As you switch from one provider to another, the best way to avoid that dreaded gap in your coverage is by setting the start date of your new policy to coincide with your old policy's expiration date. Having the new policy kick in on the same date as the expiration of your old policy eliminates any potential gaps, meaning you won't have to worry about being without insurance coverage or the effects it could have on your premiums.

Here are a few other tips to consider as you switch insurance providers.

  • If you can't find an expiration date on your old insurance policy, don't hesitate to ask your insurance agent.
  • Don't forget to inform your insurance agent that you're not renewing your policy, since most insurers tend to auto-renew policies on their customers' behalf.
  • If you're canceling your insurance policy, find out if your insurer charges a cancellation fee. This may come out of any refunds issued for your prorated insurance premiums.

With the above advice, you can avoid gaps in your auto insurance coverage and the negative consequences that often come with those gaps. For more information, contact a business such as Mascott Insurance Services LLC