A lady friend of mine sold her car 4 months ago and decided to just do without a car and use public transportation.
She has gotten tired of all the hassle being carless, walking, taking the bus and bumming rides and has decided to buy a car.
The problem is she of course had to cancel her car insurance policy 4 months ago since she no longer had a car to insure.
Now her old insurance company wants to charge her a rather large penalty to start a new policy because she had “a lapse in insurance”
I don’t understand the reasoning behind this penalty. I could understand it if she kept owning a car and stopped insuring it for 4 months, but she owned no car during that period.
I advised her this must be some kind of mistake on the insurance company’s part and to get on the phone and check out other company’ policy on this. She says her insurance company (Progressive) already did that and all companies determine that what she did was a penalizable (sp?) lapse in insurance.
Tell her to get quotes from multiple insurance companies and take the best offer. If her old company doesn’t want her business, someone else will, and they might be cheaper.
Some of the other companies may go off history of claims and general driving, and ignore the last 4 months.
Insurance brokers may be able to sell her a policy based on their trust that there is no significance to the lapse. They will probably be a bit more expensive than regular insurance.
Maybe there is an insurance broker in the town or in at the city that will sell her the cover.
Just curious. Was there a way she could have kept car insurance for the past 4 months to prevent this “lapse”?
What would you insure if you don’t own a car to insure? Could she have just kept insurance on the car she sold 4 months ago so she could honestly state she never had a lapse in insurance coverage?
It’s legal. You don’t have to own a car to have car insurance. Your coverage would still apply when you drive a vehicle you don’t own (with the owner’s permission, of course). Of course, it’s usually a good idea to tell your insurer so you don’t continue paying for coverage of your own vehicle. It’s called non-owned or non-owner insurance.
Well, maybe. Did she actually talk to someone when she cancelled her policy? If she discontinued coverage using their website, it’s not like they would have had the chance. Plus she’d have to have told them why she was cancelling, or they’d just assume she found cheaper coverage.
I know people who simply chose to keep paying rather than risk a lapse and the resulting hike in rates! It is scummy but it’s insurance companies so pretty low expectations, kinda to be expected.
(I have CAA, Premium coverage, though I have never had a drivers licence or a car! But if your car breaks, and I’m in it, no worries! They’ll fetch us gas, jump your car, tow us, give us a loaner, etc!)
True, in Michigan the insurance is on the car; in Ohio the insurance is on the person. My mom lives in Ohio and her insurance company told her that a friend of mine that doesn’t own a car and has no insurance would not be covered under her policy. I spoke with my insurance company in Michigan and they said if I loaned her my car when she came here that she would be covered because Michigan is so much better than Ohio.
Wish that was true when it came to fixing the roads.
You can have the insurance company suspend coverage. Keeps the policy on the books but no coverage is being extended. We are doing this currently for our van policy. It go totaled so we had the company suspend coverage. Only reason we did this is there are some grandfathered in coverages and deductibles the company does not offer anymore. And if we cancel the policy those are gone. When we get the new vehicle we just have the company apply that policy to the new vehicle.
And for the OP there is no lapse in coverage. There is nothing to cover. OP needs to go to multiple companies and get quotes.
I sold my car when I moved overseas 10 years ago… and didn’t have auto insurance when I didn’t own a car for 10 years. Last year I bough a car to keep in the US so I don’t have to rent one. I used the same insurance company I always have and it was no problem to re-activate my insurance.
I would have agreed, but I did a quick search and came up withthis page from the state government which says, “If You Don’t Have Vehicle Insurance, You Can’t Drive in Ohio!” It’s still not clear to me from the information on this page whether that requirement is fulfilled by the car owner’s insurance policy. I tried calling the number but got put on hold. I was willing to make a call to fight ignorance but not to stay on indefinite hold.
Hmmm… way too complicated. I moved between provinces a few times in Canada and NEVER hit this stupid issue, but it’s been a while since I lapsed any insurance. Some provinces in Canada have socialized car insurance, pretty much the same idea as our excellent medical coverage. Your insurance is basically a more expensive license fee - $X a month based on car type and driving record. Covers everyone driving a car including out-of-state/province drivers. IIRC they did not even have the right to charge more for younger drivers or males under 25 - same rate for everyone. To avoid the good driver in the household getting the car insured, if you have a bad driving record and no car insured, your driver’s license costs a LOT more. (a few hundred dollars).
I think all the Canadian provinces should adopt this system. Under that system I saw a LOT less insurance hassles.
They may say it’s on the car, but they way it works is that it’s on the person. That’s they way my insurance company in Michigan explained the difference to me; I asked this friend could drive my car when she came to Michigan and my agent said of course she can because in Michigan insurance follows the car. Also, my mom’s agent in Ohio specifically said that my friend in Ohio would not be covered if she drove my mom’s car and specially told my mom that they would drop her insurance if so and so drove her car again without getting insurance.
I realize it’s hard to imagine that a government would make a law that is difficult to understand. :smack:
One of the folks I work with used to be in underwriting (now claims) and I put this scenario to her. This is obviously something that is going to vary according to what a given state’s regulations allow, but her answer (for Colorado) is that we would not penalize a customer who simply went without a car for 4 months.
As long as it is not evident the person was actually driving without insurance (a huge no-no that we all love to punish) then not only do you get your old policy back, you get your old discounts as well. For instance, I have a 20% discount for not having any accidents since Jesus was a kid. If I decide I want to sell my car and go on an adventure, I can come back in 4 months, maybe longer, and use my gold and jools to buy a new car and get it insured with my old discounts. I might need to prove I wasn’t driving uninsured, but a sales agreement with yesterday’s date on it will suffice, or bus passes, or taxi receipts, or Eurail passes, etc. documenting other modes of transportation were used during the uninsured period. Now if you go too long without driving (years?), underwriting will decide maybe you’ve lost sufficient experience and might stick you with the newbie rates, but that’s different from what the OP describes.
