When an insurance policy is lapsed it means that the insurance is no longer active and you have no coverage so in the event you get into an accident with a vehicle for car insurance then the car insurance will not pay out.
A car insurance lapse is a period of time when you own a car but you don't have car insurance coverage.
A lapse in coverage can happen because you didn't pay your car insurance premiums or you were dropped from your insurance company.
A lapsed car insurance policy will not affect your credit but if you let your car insurance lapse too often it can be hard to get car insurance or you may pay a higher premium.
There is no direct affect between car insurance and your credit, paying your insurance bill late or not at all could lead to debt collection reports.
Debt collection reports do appear on your credit report (often for 7-10 years) and can be read by future lenders.
When your car insurance policy is cancelled, it usually stays on your insurance record for about five years, but it can be longer.
This could result in you needing to get high-risk car insurance, which comes with higher-than-average premiums.
But if you fail to renew the policy on time, your insurance will expire and the car will be at risk.
You will not get any compensation for the damages suffered after the expiry of car insurance policy.
In case of theft or fire, you will have to manage without any sort of financial assistance from the insurance company.
Even if you're not going to be driving for a while and you want to avoid paying for coverage, you can't exactly pause your car insurance.
However, some companies may allow you to suspend your liability coverage if you're putting your car in storage as long as your lender allows it.
A policy can be revived by paying the past premiums, and additional charges as levied by the insurer.
Often, insurers come up with special schemes or campaigns to revive lapsed policies.
If your policy has lapsed due to non-payment of premiums within the due date, the terms and conditions of the policy contract are rendered void, till you revive your policy.
Always keep your policy in force to ensure that your family gets their financial protection assured by your policy.