Refusing, or forgetting to pay bills, is a basic American right. It’s what makes this country great. Who doesn’t love to test the limits of Comcast’s patience by waiting an extra seven months to pay a bill? What’s the harm in going a few months without water (and a shower), if it means sticking it to the man?
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Auto Parts & Accessories
In most cases, these shenanigans are harmless, with insignificant consequences. However, lapsing on an auto policy is NOT something drivers want to do. The following five reasons are why car insurance should be the first bill paid at all times.
1. Higher Future Premiums
While most companies cannot charge extra for being tardy, car insurance companies (subject to state filing laws) are free to charge whatever to whomever, whenever they want. Insurance is an individualized utility, with monthly premiums calculated based upon the specifics of your life, so having a lapsed auto policy on your record is a one-way ticket to higher premiums.
Those who think they get impunity by switching agencies are in for a rude awakening; all insurance agents are capable of seeing whether or not a person lapsed on an auto policy. Though it takes several months of missing payments before an insurance agent will cancel your policy, it will take a lifetime of higher premiums to fully appreciate why lapsing is an awful idea.
2. It Negatively Affects Credit Scores
Car insurance companies & credit scores have become BFFs. Just like two junior high school girls, this relationship is both iron-clad, and annoying. Not only do credit scores affect how much drivers pay per month in insurance, but failure to pay monthly insurance can also negatively affect a driver’s credit score.
This vicious cycle of insurance and credit can doom drivers for a lifetime, if they are not careful and responsible with monthly payments.
3. Fines or Suspensions if Caught
The thing to remember about a lapsed policy is that it sounds better than it is. While “lapsed” suggests something is late, or dormant, or hiding in the trunk, the truth is that if your policy is lapsed, you are driving without insurance. There is no mercy for somebody driving with a lapsed policy, versus somebody who never had insurance in the first place.
In the eyes of the law, both drivers are irresponsible and equally uninsured. This means that if a driver with a lapsed policy is pulled over, he or she is subject to tickets, fines, and possibly even suspensions, depending on the state. Having a lapsed policy is the same as having no policy at all, which is why keeping it up-to-date is crucial for those who hope never to find out what the inside of a holding cell looks like.
4. Complete Financial Responsibility in the Event of an Accident
Getting pulled over by the police without insurance could be a “best-case scenario” for some. Being involved in an accident, while driving with a lapsed policy, is much worse. “Lapsed” is the same as non-existent in the eyes of the law, which means that if someone is involved in an accident, he or she will bear the burden of financial responsibility for the accident.
Not only are people responsible for repairing any damages to their own automobiles, but they are also 100% responsible for the damages to anyone else’s vehicle, as well as any medical bills. This can be a figure that easily surpasses the amount of money people make in a lifetime, which means, paying that tab would be a million times worse than paying for auto insurance.
5. Lawsuit in the Event of Failure to Meet Financial Responsibility
In the extremely likely event that a driver is unable to afford the damages caused by an accident, they are then subject to the courts, where they will undoubtedly lose their case, shirts, and anything else they have ever owned. A lawsuit is inevitable in the event of an uninsured accident, and unless the driver at fault is sitting on a pile of money (in which case, they should have just paid their insurance premium).
Courts will have little sympathy for a lapsed auto policy, particularly if the driver in question is using the “I forgot,” or “paying bills is lame,” defense. The result could be the court-ordered sale of personal belongings, additional fines, and jail time. All of which can be easily avoided IF the driver pays his or her bills on time.
Although paying bills is super lame, some bills are super worth it. Making it a priority to never lapse on an auto insurance payment is a no-brainer, as the consequences of failing to do so are more inconvenient than remembering to send a monthly check.