My friend was in an accident. He had insurance at the time
(comprehensive, full coverage, or whatever it's called), but since
then he got behind on his payments and his insurance may be
canceled. Can he be certain that the accident will still be covered
since his insurance was valid then?
Your friend paid for insurance coverage for a certain period of
time, so if your friend's car insurance policy was in force at the
time of the accident, then he should be covered for any
he, or others, make against his policy. Your auto policy just
needs to be valid on the actual day of the accident for you to have
coverage for the incident.
It would help your friend's situation if the accident happened a
few weeks before the policy canceled and the insurance company had
already received the claims If instead the policy canceled
out, due to non-payment, the day after the accident and before
claims were made, he better have proof of when the accident
is rampant, so insurance companies will be suspicious of claims
coming in on a canceled policy.
This means if your friend was in a single-car accident, didn't
get a police report, and waited until after his policy canceled to
make a claim, he may have a tough time tough convincing his car
insurance company that the accident happened when his policy was in
effect and getting his claim accepted -- unless he can provide hard
proof of the date the incident. A police report, witnesses,
and the statement of any other driver involved should help confirm
the date of the accident.
You said your friend has
, so we take that to mean that he has not only state liability
coverages but also physical damage coverages of collision and
comprehensive. This means that others he harmed can file claims
and property damage liability coverages. For any damages to
his own vehicle, your friend can make a collision claim. A
deductible will be due. (See "What if I can't pay my
An accident without those coverages leaves him personally liable
to the people he hit and responsible for repairing his own car.
Canceled? Try for reinstatement
In general, even if a car is totaled and not drivable, you
should keep insurance on the vehicle until all claims are settled.
(See "Can you cancel your policy after an accident?")
Your friend should not only now contact his car insurance company
to make sure his policy was valid on the day of the accident and
that the insurer will accept claims, but also to see if there is a
way to reinstate his policy.
Many car insurance companies will reinstate an auto policy that
has been canceled due to non-payment as long as the lapse in
coverage with them has been less than 30 days and there have been
no losses during the time you were without coverage. For a
reinstatement of your friend's policy to be possible, he'd normally
be required to sign a statement of no loss.
A no-loss statement has you certify that there were no losses,
accidents or circumstances that might give rise to a claim during
from the cancellation date to the reinstatement date. This is
done so motorists clearly understand that they can't make a claim
for anything that occurred during the lapse in coverage.
Losses that occurred before the lapse, when the policy was still
valid, or once the policy is reinstated, would be covered.
Tell your friend to get his policy reinstated quickly.
Depending upon state laws he could be penalized if he doesn't have
insurance on his car and also it can be harder (and much more
expensive) to get an auto insurance policy after a lapse.
Car insurers typically give better rates to drivers who can show
they've carried continuous coverage, so your friend will likely
need to shop around to get the best car insurance rates possible if
his previous insurer won't reinstate his policy. Even with a
lapse in coverage, comparison shopping can help you save
money. (See "Pocket $1,102 just by shopping