Last year due to a replaced debit card (and personal stupidity), we had a lapse in auto insurance that was around 60-90 days. When we reached out to AAA, we of course had to start a new policy due to the length of the lapse. Our coverage went up from around $2500 to around $2800/2900. We’ve reached our renewal for 24/25 and our new policy is now at $3200.
Being in CA I’ve read that policies have increased across the board, but I was thinking part of this increase could be due to the lapse, and that perhaps being a long time customer with AAA they would be able to remove the penalty for last year’s lapse (wishful thinking, I know, but I figured worth a shot).
When I spoke with AAA today I was told that the lapse last year has no affect on this years policy/premium and that the increase was due to the general increase of insurance premiums. Is it true that lapses in coverage aren’t penalized in future years? When I Google it I haven’t found anything mentioning that lapses affect premium rates for x number of years, or anything like that.
I filled out a quote from USAA and their quote was more in the $2600 range, but if what AAA told me is incorrect and the lapse still affects our premium, I imagine USAA could find out we had a lapse and adjust the premium accordingly, is that correct?
Had lapse in coverage last year; renewal time has come
byu/gopacktennie inInsurance
Posted by gopacktennie
3 Comments
After 6-12 months of continuous insurance you are no longer penalized for the lapse with most carriers.
Your increase is mainly due to the insurance commissioner of CA not approving rate increases for the last FOUR years. You’re getting it all at once when the rest of the country has been hit with these every six months for years! Reach out to your state legislators. When your policy lapses and you get it reinstated the risk goes up and why you pay more. No, they can’t raise your rate for a lapse at your renewal.
You are overreacting. Lapse basically has 0 effect once you start that new policy again. That lapse is already cooked into your new rate when you signed up with them again. I’d go with the cheaper quote with USAA lol