Auto Insurance Tip--Avoid Coverage Gaps

Auto insurance rates go up if you have a gap in coverage. In other words, if you do not have auto insurance in force for a period of time, you will pay a higher rate when you get new insurance because of that gap.

A common mistake that people make is to cancel their auto insurance policy when they have been in an accident that is the other driver's fault and their car is totalled out. In some cases, people will take awhile to get a new car or use the settlement money for other purposes and either cancel or let their existing insurance policy on the wrecked car lapse.

While it is true that it does not make sense to maintain coverage on a wrecked, undrivable vehicle, it makes less sense to cancel the policy, wait, and then get a new car with higher insurance rates because of that gap in coverage. To avoid this, keep the policy in force on the original vehicle, even if it is wrecked, until you get the new vehicle. Then, simply have your insurance agent swap out the vehicles and you will not pay a higher rate because you kept continuous coverage.

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