The Vegas Voice 4-21

Letting Your Auto Insurance Lapse
By: Jim Valkenburg / Insurance Insight
Many years ago, the Nevada DMV gave you
a 7-day grace period to reinstate your
liability insurance once it lapsed or cancelled.
But no more.
Now you cannot let your auto insurance lapse for even one day
without incurring a fine!
The fines for the first offense range from $251 for a lapse of 1-30
days up to $1,251 for a lapse of 181 days or more. For the 2 nd offense the
fines range from $501 to $1,501 and for the 3 rd offense (which includes
driver’s license suspension) the fines can go as high as $1,751.
If you drop the liability insurance on any vehicle for any reason,
you must cancel the registration and surrender the license plates. In
other words, if you have “active” plates on your vehicle, you MUST have
liability insurance - whether the vehicle is driven or not.
I once had a client that was going to be out of the country for 4
months and saw no reason to keep insurance on his vehicle which was
just going to sit in his garage. He cancelled his insurance while he was
gone (without consulting me).
When he returned, he not only had fines from the state, but a lapse
in coverage which prevented him from retaining his preferred status.
Big mistake.
The responsibility rests clearly on you to know when insurance
payments are due and, most importantly, when your policy will renew.
In general, most companies allow you to make monthly payments a
few days late without cancelling your policy.
But on your renewal date, the payment must be made on time. What
most insureds don’t realize is that their policy actually cancels at 12:01
AM (one minute after midnight) on the expiration date.
For example, if your policy expires on April 1, then your policy
cancels the first minute of that date. So, if you haven’t made a payment
before you wake up on April 1, you have a lapsed policy.
Some companies will reinstate with no lapse if you pay that day, but
some do not. The best way to be safe is to pay your renewal premium at
least one day early.
Jim Valkenburg is a retired military officer and insurance executive.
He and his wife owned and operated their own insurance agency for
over 16 years. His primary purpose is to give out real information
that can be used to make intelligent insurance decisions.
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