One thing is certain in the US, you cannot drive without auto insurance. Well, getting auto insurance is not that difficult. If you are unable to pay your auto insurance on time, make sure that you consult with your insurer. And if you are deliberately delaying your payments, you will have to face consequences. It is better you start paying your insurance premiums. If you happen to become a defaulter once, you can’t even imagine what happens if you don’t pay your car insurance.
Well, if you are unaware of the consequences of being a defaulter for car insurance, then read further to get the exact idea of what will happen to you.
The insurance company will send you a reminder
You can miss a payment for the first time due to any reason. It may be because you lost your job, or you had an emergency expense, etc. This is why, if you default for the first time, the company will send you a notice. You will receive it via mail or by text message. Moreover, some private insurance companies charge a fee for late payments. Not only will you have to pay the said amount but additional bucks as well if your hired company asks for the late fee. We highly recommend you to settle the matter at this stage, or you will lose your coverage.
You will lose your coverage
After receiving the notice, if you don’t respond to it immediately, the insurance company will cut off your coverage. According to the auto insurance policy experts, if your insurance payment is in arrears, and you happen to get into an accident, all the costs that would be incurred will have to be paid by you.
Well, this is not the only misery you will face. In case the cops catch you, they can charge you with heavy fines and you may have to bear penalties for driving without insurance. As mentioned earlier, it is illegal to drive without minimum coverage.
Still, if you are careless about the payments, you will have to pay increased premiums.
Your new policy will come with a high premium
You are aware that if you don’t pay the premium on time and don’t respond to the reminder, your insurance will be canceled. And you will have to purchase another policy. And when you will go for it, you will get higher quotes only. The reason being, your history will be proof of you being a defaulter. Therefore, no insurance company will give you lower premiums than you had before.
When you buy an insurance policy, the amount of premium depends on the type of insurance you buy. It is not only limited to this, but also your driving history, your age, and many other aspects matter a lot.
However, even if you still don’t get your head straight, you might end up with a collection agency.
The collection agency will come after you
If you are a habitual defaulter, then your insurance company will hand your case over to the collection agency. At first, the collection agency will ask you to repay the entire amount. However, if you are not able to comply with the agency’s notice, you will have debt over you, which may decrease your credit score.
And everyone knows how scary it is to have a bad credit score. Well, if you don’t know its severe consequences, then let us inform you that if you have a bad credit score, you will neither be able to buy or lease a house, nor another vehicle. Apart from this, you won’t get loans, your application for a new credit card might get rejected, and you might not be able to invest, etc.
Not only you will be drowned in debts but there is a potential chance that you might lose your vehicle as well.
The lender might take away your vehicle
If you have purchased your new car on a lease or have taken a loan, you must ensure that your vehicle is insured with minimum coverage at least.
However, if you are a defaulter, your lender has legal rights to take back your vehicle.
In this article, we have given a detailed account of what happens if you don’t pay for your car insurance. Now it is up to you to take the safer route, or get into trouble because of your negligence. However, before we conclude, we advise you to purchase a vehicle only if you can pay for your insurance.
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