Gaps in Coverage

What are gaps in coverage?

Gaps in coverage are exactly what they sound like – gaps in time between your different auto insurance policies. That is, if you have an insurance policy on your car and you let the policy be cancelled – either because you stopped making payments or because you no longer owned a vehicle – then you were in between policies and therefore have a gap in your coverage.

Are gaps in coverage good or bad, as far as my rates are concerned?

Bad. An auto insurance provider does not want to see that you have let your policy lapse. They view this as an indication that you may let your policy with them lapse, meaning less money for them.

How do gaps in coverage affect my rates?

Because car insurance companies are not very pleased with finding gaps in your insurance coverage, your insurance rates may be negatively affected. If you have driven uninsured for any length of time, it can drive your rates up, but obviously, the fewer number of times that you were without coverage and the shorter those time periods were, the better it will be for you and your rates.

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How can I use gaps in coverage make my rates better?

Even if you are without a car for a few months, do not let your auto insurance policy lapse or be cancelled. Continue making the payments until you get a new car and then, if you are unhappy with your coverage, change policies to another company.

Are 'gaps in coverage' and 'gap coverage' the same thing?

No. Gap coverage is a term used to describe a type of coverage available to those who lease their cars – a bit of extra protection to cover them in case their standard insurance does not quite do the trick. Gaps in coverage are periods of time when you are not covered under an insurance policy.

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