What Happens When Your Car Insurance Lapses?

What happens when you had an accident, and later found out that your car insurance lapsed? Car accidents are unsettling and distressing enough, which makes insurance issues even more of a challenge. In this article, we will learn more about what to do when your insurance lapses, and the steps you can take to navigate the aftermath of an accident. 

If you’ve been involved in an accident with lapsed insurance coverage, you could be held liable for out-of-pocket costs, insurance increases, and possibly lawsuits. It is important to have an experienced attorney to help you throughout the legal process. Let’s check out some of the most common issues those without car insurance encounter after an accident. 

Do I Have to Pay Damages Out of Pocket?

If you got into a car accident and your car insurance lapsed, you would be held liable for the damages if found at fault. Even if you add an insurance policy after the accident, you will still not be covered, leaving you to foot the bill. This could lead to a number of issues, such as legal action against you, the expense of having to replace or repair your vehicle, and even issues with the other party’s insurance, as oftentimes, insurance companies try to delay paying damages when an uninsured driver is involved.

Dealing With Insurance Increases After Car Insurance Lapsed

In many cases, uninsured drivers choose not to purchase insurance due to the cost involved. However, if you are involved in an accident as an uninsured motorist, future insurance rates will only continue to increase, which might cause the uninsured driver to continue driving without coverage.

Fault vs. No-Fault States

When an accident occurs and one of the drivers is not insured, lawsuits could occur as a result, stating that the other driver was negligent, with one of the main pieces of evidence against them being their lack of insurance coverage. This can be difficult for uninsured motorists, as they might be faced with lawsuits and have to fight allegations from the opposing party. This is why it is important to have strong legal representation by your side throughout the process. 

In fault states, all motorists must have at least liability insurance, however, if someone is injured in a car accident, it is easier for the injured party to secure compensation without going through insurance. If the injuries were the result of some type of negligence by the uninsured party, they could sue for damages. This could lead to a significant financial impact for the at-fault party, as they would have to pay out of pocket for the damages. In no-fault states, however, each party is responsible for paying for the damages on their own, leaving you to foot the bill for your medical expenses and property damage.

car insurance lapse

What If The Other Driver Was at Fault?

Even if the other driver was found at fault, insurers often side with their policyholders, so it could be difficult to receive damages without experienced legal counsel. Furthermore, because you are uninsured, opposing counsel could use this against you, making it even more difficult to receive damages from your claim. In short, fault does play a significant role in how much of a financial impact the ordeal will have on the uninsured driver. 

Are There Any Grace Periods for Lapsing Insurance?

A grace period might be available to you if you have a history of being an insured motorist, however, this usually depends on your individual policy. Depending on the insurer, they might offer a grace period for you to catch up on payments before they continue with your claim. However, some insurers will consider you uninsured if you miss your payments, so it really depends on your individual insurance policy, and terms you agreed to when signing the contract.

The Importance of Legal Representation When Car Insurance Lapses

Car accident cases can be difficult to manage when all involved parties have robust insurance policies. However, when an uninsured driver is involved, the situation can get much more complicated. That’s why it is important to have experienced legal representation on your side to help you navigate the complex legalities of your case, and get you the justice that you deserve. If you were involved in a car accident, get in touch with the Mutrux Firm Injury Lawyers for a free consultation. We’re here to help you throughout the length of your claim and will represent you every step of the way.