I have a financed car and am wondering what will happen if my car insurance policy lapses? ?

Allyson Q

There are tons of websites where you can get a free insurance quote. http://www.goodinternetdeals.com/Auto-Insurance.html It only takes roughly 10 minutes to do.

Jelly Bean

The trouble that could happen to you is that in the event you have a wreck and it is totaled, you are responsible for paying for the car even though it is a loss. You do not want to let your insurance lapse ever for one or two weeks. Better for them to overlap two or three days. Also some insurance companies do not like to insure a customer who has let their policy lapse . They think you will be a high risk if you do that and could deny you.

calipink22

In most cases a finance company will give you 15 days to obtain an insurance policy before forcing insurance on the car. 2 weeks is pushing it. If you do not obtain a valid insurance policy the finance company will place VSI on the car, which is Vendor Secured Interest. They will use an insurance company they are associated with. The premium will usually be double what you would pay through your own private insurance company and they tack on the insurance premium to your monthly payments. See if you can get another insurance policy without a lapse in coverage.

PMack

then get a new policy today - it doesn't take a week or two, you can get insurance in one day

don't drive it if you don't have insurance, it's illegal and as the other poster said, if you get into a wreck you'll be screwed financially and in legal trouble.

Tonja K

If you wreck it without insurance you WILL be responsible for paying the loan, not "could be". Also, since full coverage insurance is a requirement in the finance contract, your finance company has the right to repossess if you do not maintain full coverage insurance. In today's market, many banks are repossessing if you are not protecting their investment because too many people are fraudulently wrecking vehicles.

Reign

From a banking standpoint, the bank can "force place" insurance on you, meaning they will buy a policy to cover the car until you get your insurance up to date. This will only happen if you neglect to get coverage for an extended period of time, however (A month or more). If they do, you will be responsible to pay for the policy premium that the bank chooses and it is ALWAYS more expensive than getting your own.

If your policy lapses, a letter is usually sent to your bank to inform them. It is therefore important to let them know when you change insurance companies so they do not think you dropped coverage.

Scott H

Yes, you could. The state may find out and suspend your tags. Do not let your insurance lapse.

Thomas P

I'm an insurance agent -- if you let your policy lapse, the finance company has the right to apply their own insurance, but it usually takes more than a couple weeks for them to find out you don't have insurance. If you have an accident, though, and have no insurance, you owe the the $$$ and there will no way out of paying. Safer to start your new policy the same day your old one expires.

Liz H

For auto insurance the quick way to get a good quote is do a policy comparison on car policies. Make sure that you pick similar policies with the same deductibles, auto type, location, etc so that all things are a good comparison.

What I usually recommend is an online comparison quote at http://www.lowratetoday.com since they have top name insurers and can give many quotes on car insurance polices.

chuckles951

You will be out of compliance with the terms of your loan and if the finance company finds out, they could demand all their money immediately.

and why cannot you get the new policy to cover you from the second your old one ends? That is the normal way.

George A

Worse case scenario- your car gets repo'd & your credit takes a dive into the 7th level of Hell, DMV revokes your plates & slaps you with an expensive fine & you have problems financing any more vehicles for years. (Not a problem unless you are going to go months without insurance)

Problems become even more severe if you have an accident & the finance company finds out that you had no insurance at the time of the accident. Possibly even a lawsuit by finance company to recoup their monetary losses.

mbrcatz

Yes, they'll put "forced placement" coverage on the car, which won't cover YOU at all, or pay to fix your car. But it DOES cost about 10X as much as your insurance, AND, you get billed for it.

So the first money you send in, will go to pay that - if you don't send in triple payment, or however much the forced placement is, they'll reposess your car, as your payments won't be current.

Of course, if you get in an accident during that week or two, then you have to keep paying off the loan, for the next however many years, even if the car is totalled.

Why don't you just buy online today, like at www.progressive.com, and avoid the uninsured issue??

Samuel H

This site makes finding insurance easy.
http://www.combinedautoinsurance.com/

not if you have another policy in effect within 10 days. The sooner the better. That is the usual grace period for ins.co

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