Insurance Lapses Will Negatively Impact Your Insurance Score

For all of your insurance policies, it’s important to avoid insurance lapses because they will negatively impact your insurance score, which companies use to rate your premiums.

A lapse suggests you are high risk, which leads to higher premiums or difficulty obtaining coverage. Companies may decline to cover you, especially if you have multiple gaps in your history. A lapse in your auto coverage may result in suspended license and fines. If you’re uninsured during an accident, you will be personally liable for damages to peoples injuries and damaged property.

Reapplying for insurance after a lapse often results in higher costs and stricter terms. To avoid these issues, keep track of renewals, especially if you’re on auto-pay and just assume it’s paid. And if your Mortgage pays the Homeowners out of your escrow account, be sure you continue to pay the insurance after the mortgage is paid off.