I recently got rid of my car due to engine failure and have been using my motorcycle as my main means of transportation. Because of having the bike I am not in a huge rush to purchase a new vehicle so I spoke to my State Farm agent’s office about dropping the coverage on the sold vehicle. They mentioned that if I did, when I got a new vehicle, my insurance rates would be higher due to a lapse in coverage. How accurate is this? They recommended that I drop coverage to the state minimum so that’s what’s I have done got now but I am wondering how this works. I have insurance on the bike but it’s with Geico, I’m not sure if that makes a difference or not? Thanks in advance!!
Posted by lxrch
4 Comments
There is a rating variable used in pricing that factors in continuous coverage that typically implies people without continuous coverage are higher risk.
You need non-owner car insurance. State farm must not sell that in your market? Check with other brokerages or online with the lizard or flo. The agent is right- you don’t want a lapse. Non-owner car insurance will also cover your liability if you borrow or drive someone elses vehicle.
Automobile and motorcycle insurance are considered different product lines for rating purposes, so the Agent is right that this will cause a lapse if you drop coverage on the auto.
Writing non-owner car insurance can be a headache for some carriers. Some let you just amend coverage on the existing policy, others require the Agent to rewrite the policy, which at the end, could cost MORE than if you were to just get the state minimums.
How far are you from pulling the trigger on a replacement car?
I’m probably 4-5 months out from buying another car. Thanks for the info as well!