Your auto insurance will start covering you and your vehicle right after you sign a policy. However, with backdating, the policy begins earlier than when you actually sign it. Will your provider allow you to backdate your auto insurance policy? Let’s find out.
Is Backdating Auto Insurance Possible?
No, because backdating a policy means stating that you have purchased auto insurance before the actual contract date. Insurance providers will not accept making this kind of false statement, as it could spoil their reputation and cause some liability risks. They may have no idea about the accidents/incidents that occurred before the purchase date, so if they backdate a policy without knowing anything about this, they must bear the resulting losses.
Reasons Why Customers Want to Buy Backdated Auto Insurance
Most states mandate every driver should carry some amount of liability coverage. However, some drivers take it lightly and ignore buying auto insurance. Driving without insurance won’t be an issue until you get into an accident that causes serious property damage or bodily injury. An at-fault accident will make you liable for the damages, and in such circumstances, you might want to buy a car insurance policy with backdate to stay covered.
Some other reasons include:
- You forget to renew your policy, but get stuck in an accident, thus experiencing coverage lapse.
- You cancelled your coverage but were involved in an accident right after the cancellation.
- You bought a second-hand car and started driving it right after, but unfortunately caused an accident.
Reasons Why Insurance Providers Hesitate to Backdate Auto Insurance
The above-mentioned reasons will make you liable for the losses and damages, so you might want to backdate your auto insurance to get reimbursements. However, auto insurance providers will not backdate your policy for some reasons, including:
- Legal Issues – Insurance policies are legal contracts, but backdating a policy is a fraudulent activity with its own lawful issues. Also, backdating an auto insurance policy in California is a federal fraud offense.
- Financial Losses – Insurance providers usually weigh the buyer’s potential risk exposures and calculate the premiums accordingly. Also, they will use premiums paid by their clients to cover their losses. Backdating a policy neither provides insurers some time to evaluate their buyers nor provides premium benefits, but they have to be responsible for the damage/injury caused by the buyer, which is a loss for them.
What Should I Do Instead of Backdating a Policy?
If you have a coverage lapse in your auto insurance either because of temporary cancellation or not paying premiums on time, you can still reinstate your coverage by signing a statement of no loss. A no-loss form is a legal document that states no accidents occurred when the policy was inactive, so it prevents coverage for claims made between the cancellation and reinstatement period.
As backdating a policy is impossible, you must avoid the need for it. Buy affordable car insurance, pay your premiums on time, and prevent coverage lapse that eliminates the need for backdating.