How Does Canceling Car Insurance Affect Future Rates?

The Impact of a Lapse in Car Insurance Coverage on Future Premiums 

Whether you’re going away for college, selling your vehicle, or taking it off the road to restore it, there are many valid reasons why you would want to cancel your auto insurance policy. After all, in many situations, you won’t have a vehicle to insure and it’s a great way to save money. The problem with this is that you could be sacrificing long-term savings for a short-term windfall. In essence, canceling your auto insurance in Antioch, CA may seem like a good idea to save money, but the gap in coverage could come back to haunt you when you need insurance in the future.

When insurers are determining your premium, they look at a variety of factors. In addition to your vehicle, age, gender, and driving history, insurers will look at whether or not you’ve had gaps in coverage. If you let your insurance lapse, you could face steeper rates in the future. A lengthy gap in car coverage could mean that you are viewed as a high-risk driver when you start shopping for a new policy. In short, you end up paying higher premiums.

If you plan to drive again in a short period of time, it might make sense to keep your policy. Call your insurer and explain the situation. You may be able to keep your coverage and save money. Your annual mileage is factored into the premium, meaning that if you drive fewer a year, your rates could go down significantly.

Additionally, it’s important to avoid an inadvertent lapse in coverage. Failing to pay your premiums or losing your license could mean that insurers think twice about offering you coverage.

Are you canceling car insurance? Concerned about a gap in car insurance coverage? Talk to the professionals at Jack Stone Insurance Agency who are here to help. We provide quality car insurance for your needs in Antioch, Brentwood, and neighboring cities in CA.

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