Reinstating your auto insurance is usually the best route to take after your policy has been canceled. However, reinstalling after losing your grace period can be tricky. Learn the benefits of reinstating your policy and tips to improve your chances of success.
What is auto insurance refund?
Reinstatement is when your policy is reinstated after it has expired for non-payment. A policy reinstatement comes from the same insurance company it was previously insured with, and it can also have the same policy number and coverage.
Auto insurance refunds come in two different forms. With the former, the expiration of your policy remains in place and your reinstatement comes with new effective dates. With the second, your policy continues as if a lapse never occurred. A refund without a lapse is better because there is no time when the policy does not cover it. If an incident occurred while your policy was expired, your insurance company would not cover any claims from then on.
Benefits of car insurance reinstatement
The main benefit of car insurance reinstatement is that it keeps your policy in force. You don’t need to get insurance quotes, which can be time consuming and a bit complicated. It is the easiest way to regain coverage on your vehicle.
Another benefit is continuing with the same insurance company that you are already familiar with. You may already have your numbers stored on your phone and have an established relationship with an agent. If you get good customer service and competitive rates, the easiest thing to do is stick with the same provider.
Resetting a policy without a lapse also means you’re not automatically at high risk. Your premium can go up if your policy expires, so a reinstated policy might be the cheapest way to go.
Penalties associated with reinstatement
If you’ve had a monthly payment plan, your insurance company may no longer want to offer it. That means you may have to pay semi-annually or annually. At a minimum, you will have to pay premiums for the remainder of your policy period. Sometimes you can get away with paying less, but it depends on your insurance company.
You will also need to pay late fees to get your policy started again. You may also be charged a surcharge (additional premiums) based on how long you were without coverage.
Expecting you to pay more when you are late for non-payment may seem unfair, but that’s how many bills work. Paying late and letting your car insurance lapse costs you more overall, and could be a lot more.
Personal budgets are not easy to meet, and unexpected events can arise to leave the best planner behind. Take a close look at your spending and try to find areas where you can cut back.
Consider asking your insurance agent what you can do to lower your insurance cost. For example, you may be able to increase your deductible and lower your coverage. This lowers your premium, but it also lowers your coverage, leaving you more vulnerable. However, if the option is less coverage or no coverage, the best option is less coverage.
If you anticipate being late with your insurance payment, contact your insurance company. Let them know your situation and when you will pay. They may be able to extend some flexibility.
Tips for reinstating car insurance
Resetting your policy once is not a guarantee, and multiple refunds are even more difficult. Don’t expect more than two withdrawals in a three-year period.
Your chances of reinstatement are better if you have multiple policies bundled together. The policy mix gives you more bargaining power. Anyone can fall behind on their payment, but don’t get caught in the trap of paying on the last day of your grace period each month. It is not a good sign for the insurer when requesting a refund, and if something goes wrong, there is no room for maneuver.
If you are considering a possible denial of your request for reinstatement, offer to pay in full. Many times, making the full payment will ensure your chances of reinstatement.