Words of Warning for Lapsed NY Insurance

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When finances get tight, you have to make some difficult decisions. There are lots of financial corners to cut; you can cut out that third beer or pass on the Supersize at McDonalds. However, if you live in New York State, you’ll want to rule out skipping a car insurance payment, even with NYC cheap car insurance. Canceling or allowing your car insurance to lapse in New York State comes with some severe and immediate consequences.

You may be confused about what a lapse is and when one happens. The most natural cause is simply canceling your car insurance, but here’s a quick rundown of the sublte gaps that can cause a lapse:

  • The gap between the cancellation of your old insurance and the start of new insurance.
  • The gap between the cancellation of your old insurance and when you surrender your license plates or cancel your registration.
  • The gap between the cancellation of your old insurance and supplying proof that your car no longer requires insurance (car registered in another state, impounded, etc)
  • The gap between when you register your car and when insurance kicks in on it.

Should any of these occur, you’ll receive a letter from the New York State Department of Motor Vehicles (DMV) asking you to prove that you have valid insurance or that you sold or otherwise lost possession of the vehicle. If you just don’t have insurance, the only way out is to surrender your license plates to the DMV. You may be tempted to just toss the letter and keep driving, but that won’t get you very far.

If you keep your plates after lapsing insurance, the clock starts ticking. You have up to 90 days to reinstate your insurance, but even then your registration will be suspended for the same number of days you drove without insurance. If you go 20 days without insurance, your registration will be suspended for 20 days after you obtain valid insurance.

If you go 90 days (or more) without valid insurance, the DMV will also suspend your driver’s license in the same way. If you go for 100 days without insurance, both your registration and license will be suspended for 100 days. Not only that, but you’ll have to pay a termination fee of $50 as well.

As you can see, while paying for car insurance every month might put a squeeze on your bank account, it’s well worth it to not deal with all the headaches resulting from a lapse.

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