Are you about to sell your vehicle and go car-free? If so, you might be looking forward to the steep drop in your monthly transportation expenses, especially if you had high car insurance bills. But don’t drop that car insurance just yet. The ways in which the auto industry works can make it more difficult to get car insurance again after a lapse, depending on the state you live in. Dropping your insurance might save you money in the short-term, but it could make your life a whole lot more expensive later on.
Rental Car Insurance
One reason to keep your insurance current and paid is for those times when you want to rent a car. Yes, you could buy insurance through the rental car agency, but that gets very expensive after a few days. It’s not unusual for rental agencies to have special deals for very long-term renters, but those aren’t guaranteed — your favorite rental agency might not have those deals available. Your rental insurance fee could add up to more than the plain rental fee alone. That can make it very difficult and expensive to rent a car for more than a few days if you have to.
If you keep your car insurance intact, you can use the insurance in place of most of the rental agency’s insurance. For a long-term rental, that makes the cost much easier to handle. One thing you might want to look into is converting your auto insurance to a non-owner policy made specifically to cover car-free people who frequently rent cars. Be aware, though, that not all states and agencies have these policies, or if they have a non-owner policy, it might not cover rental cars. You must check with your insurance agent before assuming anything.
Credit Checks
Some states let insurance companies check your credit before offering you car insurance again. This is a concern even if you have great credit right now, because you just don’t know what the future holds. No one wants to think about that, but it is possible that something will happen to ruin your credit. If you live in a state that allows insurance companies to consider your credit — and according to Credit Karma, that’s every state except California, Massachusetts, and Hawaii. Keep your insurance!
Lapse Due To Canceling
Usually when insurance companies talk about car insurance lapses, they’re referring to times when your insurance is canceled because you didn’t pay. Insurers realize that someone without a car might not have car insurance. However, you could run into insurers who are still reluctant to insure someone who hasn’t been driving for a while. They might still look at your period of no insurance as a lapse, even though your reasons for dropping your insurance made perfect sense.
If you’re sure you’ll be going back to the same agent for insurance should you need it, you could be fine. Talk to your agent to find out how he or she would treat an application from you. But if you think you might move to another state, where you’d have to get another agent, having that break in coverage might work against you. Again, talk to your agent, like those at ESI Insurance Agency, to see how your situation would most likely be viewed.
Rental Car Insurance
One reason to keep your insurance current and paid is for those times when you want to rent a car. Yes, you could buy insurance through the rental car agency, but that gets very expensive after a few days. It’s not unusual for rental agencies to have special deals for very long-term renters, but those aren’t guaranteed — your favorite rental agency might not have those deals available. Your rental insurance fee could add up to more than the plain rental fee alone. That can make it very difficult and expensive to rent a car for more than a few days if you have to.
If you keep your car insurance intact, you can use the insurance in place of most of the rental agency’s insurance. For a long-term rental, that makes the cost much easier to handle. One thing you might want to look into is converting your auto insurance to a non-owner policy made specifically to cover car-free people who frequently rent cars. Be aware, though, that not all states and agencies have these policies, or if they have a non-owner policy, it might not cover rental cars. You must check with your insurance agent before assuming anything.
Credit Checks
Some states let insurance companies check your credit before offering you car insurance again. This is a concern even if you have great credit right now, because you just don’t know what the future holds. No one wants to think about that, but it is possible that something will happen to ruin your credit. If you live in a state that allows insurance companies to consider your credit — and according to Credit Karma, that’s every state except California, Massachusetts, and Hawaii. Keep your insurance!
Lapse Due To Canceling
Usually when insurance companies talk about car insurance lapses, they’re referring to times when your insurance is canceled because you didn’t pay. Insurers realize that someone without a car might not have car insurance. However, you could run into insurers who are still reluctant to insure someone who hasn’t been driving for a while. They might still look at your period of no insurance as a lapse, even though your reasons for dropping your insurance made perfect sense.
If you’re sure you’ll be going back to the same agent for insurance should you need it, you could be fine. Talk to your agent to find out how he or she would treat an application from you. But if you think you might move to another state, where you’d have to get another agent, having that break in coverage might work against you. Again, talk to your agent, like those at ESI Insurance Agency, to see how your situation would most likely be viewed.
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