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Changing Your Insurance Provider With No Lapse In Coverage



It is human nature to rely on professionals who serve us, especially since few have the time to develop competence in all fields of endeavor. Unfortunately that can lead to a type of laziness when it comes to things that matter most to all of us, which is our health and safety.

This can apply to doctors, lawyers, insurance professionals, insurance companies. But we all do need to take a little time to inform and educate ourselves about the important issues going on in our daily lives.

Most of us don't get around to really reading or examining our auto insurance policy, so we have set up our learning center to help you to know more about auto insurance and how it affects you and your family.

One thing is very important to know about your policy. Exactly when does the policy coverage begin, and exactly when does the coverage end?

If you are insuring an auto that previously had no coverage, then your coverage will begin at the time you purchase the insurance policy. This is known as a "binder", which is a way of expressing "coverage is now bound", or "active".

Even though you do not actually have the auto policy in your hand, the insurance agent, (as the agent for the insurance company), legally begins coverage on your vehicle at the time of policy purchase. This is called "binding coverage."

If you are renewing insurance for a vehicle that currently has coverage, the new policy normally will begin at the moment of expiration of the old policy.

An insurance industry standard has been set up; this standard is that all policies, (auto, health, homeowners, etc.), will expire at 12:01 AM at the address of the policy owner. If you live in Colorado, the policy expires 12:01 AM Colorado time, (Mountain Standard Time, or in the summer, Mountain Daylight Savings Time). If in Florida; then your policy expires 12:01 AM Florida time, (Eastern Standard Time, or in the summer, Eastern Daylight Savings Time).

If the policy is a six-month policy then it will expire six months from either the time of renewal or the day of the binder in the case of a new, first time policy.

As the title of this article suggests; assuming you are changing your insurance company, another factor you should be aware of is that many insurance companies are now using credit rating as part of their rating procedures.

Those with higher credit ratings are programmed to receive the best rates due to the fact that they are statistically shown to be better drivers, and will also, (there are always exceptions to any rule), pay their premiums on time. This is a win-win for both parties since it saves costs and ultimately allows lower relative premium rates.

You should give your old insurance company written notice of your desire to cancel a policy. Usually this is accomplished by contacting your insurance agent, or the company through their toll free phone line.

The important part here is that you should see to it that there is no lapse in coverage between your old policy and your new one. Sometimes it is not possible to have the old policy stop at the exact same time the new one becomes active, but that is the desired goal.

Even if there is some overlap, you should have your new policy active before canceling the old policy. If you allow the old policy to cancel for non-payment then your credit rating can be negatively affected by the insurance company. This can put you into a higher premium-rating bracket.

Also having any type of lapse in insurance can earn you penalties from your state. Depending upon how long the lapse is (and your state's laws) the penalty may be a simple fine up to the suspension of your vehicle's registration and plates and/or your driver's license.

Again, the way to avoid any type of lapse is to notify your insurance company in writing, or have your insurance agent do so for you. This can easily be accomplished by what is known as an "Accord Form" which the agent will fill out and notify the insurance company for you.

Accord Forms are standardized forms the insurance industry uses to notify insurance companies of changes or cancellations.


You are moving out of state into a different one, and you need a policy in your new location. Estimate the time you will be leaving the state, and go online to CarInsurance.com, or call one of their agents on the toll free number to get your new policy in the state you will be moving into.

Once your new policy binder is active, note the time and day of coverage, then call your former agent or insurance company and have them cancel the old policy effective the date of your new policy so there will not be a lapse in coverage.

Remember once again another reason to avoid a lapse in coverage, other than the fact you might be driving without insurance, is that your state may suspend your driver's license and/or registration and require you to pay an expensive fine before getting your license and registration back. This too will add rating points to your insurance premium.

As with just about everything, there is a right way and a wrong way to changing over to another provider, so spare yourself the grief by paying attention to these necessary details and save money to boot.

You can switch over to our home page to get a quote online, or if you have questions, or are not sure how you should proceed just call one of our helpful agents. They will guide you through the process and assist you in obtaining the proper coverage you need, at the minimum, state regulated cost.


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