Going even one day without auto insurance coverage can lead to
higher rates. After 30 days, you're deemed to have "no prior
insurance," which can sometimes cause rates to skyrocket to twice
as much as you paid before.
The Kip Tips iPad App
Don't accept higher rates lying down, says Jim Fults,
vice-president of product management for Fireman's Fund Insurance
Co. Many states have laws to protect certain groups against rate
increases if they have a lapse in coverage -- for example, if
you're in the military and stationed overseas, or you have been in
the hospital for an extended period.
Whether you fall into such a protected group or simply gave up
driving while living in the big city or abroad, your best bet is to
shop for a policy through an independent insurance agent. Internet
quote serv�ices, such as InsWeb.com, don't give you a
place to explain a lapse, so they pull computer-generated rates
that just note that you had one. You can find an
If you get stuck paying higher rates, it should be for six
months, tops. After that, carriers should give you credit for
previous insurance -- and the discounts that go with it -- so shop
around again when it's time to renew.
This article first appeared in
Kiplinger's Personal Finance
magazine. For more help with your personal finances and
subscribe to the magazine
. It might be the best investment you ever make.