What Should You Do When Your Auto Insurance Lapses?

Letting your auto insurance lapse can have disastrous consequences for you and for your bank account. If you fail to make a payment, you won't have the coverage you need if you're involved in an accident. Additionally, you will be forced to pay higher premiums when you do find new insurance.

Driving without insurance simply isn't an option. Not only is it illegal but you could face even greater financial hardship in the even of an accident, even if the accident isn't your fault.

If you've experience an auto insurance lapse, then below are some tips to help you find new coverage at an affordable rate.

• Look for cheap car insurance - Just because one company wants to charge you a fortune for coverage, that doesn't mean you have to sign on the dotted line. Instead, shop around. You can go online and get auto insurance quotes that you can compare. Make sure the policies are similar in terms of coverage - don't just assume the lowest monthly cost is the best one. Don't make a decision until you've compared at least five auto insurance quotes.

• Drop collision - Collision coverage is one of the most costly parts of your auto insurance. While you may have to hold onto collision if you still owe money on the car, you could take out a personal loan to pay off the balance then use the money you saved on your premium to pay off the loan. If you're not sure if the difference in price would be worth it, get auto insurance quotes with and without collision coverage.

• Talk to your insurance agent - If you've only missed your payment by a few days or if you've been a good payer for a long time, your agent may go ahead and offer you auto insurance renewal. That's good news because you'll probably either continue paying the same or just slightly higher premiums. Agents won't always do this but it's absolutely worth trying.

• Ask about discounts - You'd be surprised at the number of discount programs many insurance companies offer. Generally, agents won't volunteer the information either because they make more money when you pay more money. Make sure to talk to the agents about discounts for good drivers, non-smokers, etc.

• Pay per 6 months - Many people choose the monthly payment option for their auto insurance because it seems more convenient and affordable to pay a small amount each month over a bigger amount every few months. The truth is that you'll end up paying a lot more for the monthly payments. Most insurance companies charge an additional monthly fee, plus you may have to pay one month in advance in case you miss a payment in the future.

• Start shopping around when your life situation changes - After you turn 25 or get married, your rates will take a dramatic drop. If none of the above issues help lower your costs, wait until you reach these milestones and you'll end up paying less.

Of course, the best course of action is to keep your policy active. Even if you lose your car or can't afford the payments, you're better off canceling the policy then letting it lapse.

Kian Chew is a car insurance expert and owner of Car Insurance Hot Zone. Car Insurance Hot Zone helps those who wish to lower their car insurance cost for life by using a few basic rules and some strategies which few people know. You can instantly view the secrets by visiting http://www.CarInsuranceHotZone.com

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