If my car insurance lapse and i have an accident and then am reinstated, can i file a claim?
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Asked October 3, 2016
This is definitely a difficult situation to be in. Essentially, your outcome will depend on the timeline of events. It is possible to have this type of loss covered under very specific circumstances, so let's take a look at the different scenarios and how they may play out.
In the first scenario, you are in an accident, do not have current insurance, and someone else hits you. It is possible to have the damage to your car covered under the at-fault driver's insurance. Despite popular belief, failure to provide proof of valid insurance at the time of an accident does not automatically make you at fault. However, if it is unclear who is at fault for the accident, a police officer may be more likely to label you as the liable party since you do not have insurance.
Additionally, you will be at the mercy of the at-fault driver's level of cooperation and the sympathy of their insurer. It is not uncommon for drivers to admit to causing an accident at the scene, but tell their insurers differently. Since insurance companies prefer to side with their policyholders, they may believe you were actually the at-fault party since you were driving without auto insurance coverage.
For a second scenario, let's say that you forgot to pay your insurance until it lapsed. You made a payment as soon as possible, but got in an accident before the policy coverage reinstated. In this type of situation, your insurance company will be much more forgiving and may cover the accident even though you did not have an active policy at the time. Depending on how long you have been with the company, your driving history, and payment history, your insurer may or may not cover an accident that occurs in this scenario.
Factors that will help improve the likelihood of having your claim approved include: having a policy with the company for more than three years, an excellent payment history with virtually no late or missed payments, an essentially clean driving record for the last three to five years, and no history of fraudulent or rejected claims.
The third scenario has the least favorable outcome: when an accident occurs during a policy lapse, but is not reported to the insurer until after the policy has been reinstated, an investigation of the claim will be performed. It may seem like there is no way for the company to know whether or not the accident happened during the lapse, but this is not the case. Remember that insurers are accustomed to dealing with insurance fraud and have entire departments devoted to the discovery and investigation of potentially fraudulent claims.
It is possible for your insurer to approve a claim based on this scenario, but it is unlikely. Furthermore, if your insurance company finds proof that you were dishonest about when the accident occurred, they may cancel your policy in addition to denying the claim. Unfortunately, your insurance history follows you from one company to the next, so having a claim on your record denied on the basis of fraud could haunt you for a long time.
Answered October 4, 2016 by AllstatePals