Auto Insurance « Gannon Insurance

State Cracks Down on Auto Insurance Lapses!

Tuesday, March 23rd, 2010

Don’t ask me why, because I don’t know why. I only know what we’ve seen in our day- to-day operations. The DMV seems to be paying close attention to lapsed car insurance policies and, more importantly, enforcing the laws surrounding registered vehicles with no insurance.

Why should that matter to you? Because a series of mistakes could land you in some hot water! Here’s how to easily keep this major hassle out of your life.

What the Law Says

I’m not offering legal advice, and I can’t cover the entire Motor Vehicle Code here. (Nor would I want to – as if insurance isn’t boring enough already?) But here’s an important part of it…

Simply stated, PA state law requires you to insure all registered vehicles. If you drop the insurance on a registered vehicle – regardless if it’s intentional or not, and even if only for a day – your registration is subject to a 3-month suspension. You must return the registration plate, sticker, and card to the DMV.

However, if you reinstate your insurance quickly, you can avoid the suspension by signing an affidavit declaring that nobody operated the vehicle while it was uninsured. The catch? Falsifying this statement is a misdemeanor.

I Didn’t Mean to Drop My Insurance!

If you cancel your insurance intentionally, then this article really isn’t for you. But what if it cancels by accident? What if it’s only for a few days? The DMV doesn’t really care! Here’s how it could happen to you.

Your insurance company sends you renewal notices and installment bills depending on your payment plan choice. If you miss the payment, they send you a cancel notice with a cancel date. If you don’t pay by the cancel date, they cancel your policy, you’re without insurance and they notify the state.

Most companies then allow for an “easy reinstatement” – which means they’ll accept your payment for a certain period of time and reinstate your policy. That’s nice for you. BUT…easy reinstatement does NOT mean your policy wasn’t canceled. It was. It creates a “lapse” – the period of time you were without insurance between the cancel date and the reinstatement date.

The DMV requires you to declare that nobody operated the vehicle during this lapse period. Otherwise, your registration is suspended for 3 months.

Now, let’s face it. We MUST have our cars, right? With the prospect of a 3-month suspended registration, most people are going to sign the affidavit – even if they drove the car every day during the lapse period.

What’s the solution? There’s only one I know of… Don’t get into this position in the first place! Here’s how.

How to Keep The DMV Out of Your Life

Pay your car insurance bills on time. Your policy can be canceled if your payment is late, period. And the insurance company is under no obligation to reinstate your policy… even if they’ve done so in the past.

Pay attention to everything you receive from your insurance company. It’s not junk mail! Open it. Read it. It could save you from a painful mistake. If you’re not sure what it’s telling you, we’ll help!

Switch to automatic payments. Each company offers automatic monthly deduction from your checking account. You can’t miss a payment and have an accidental lapse this

Call the Gannon Agency if you receive a late payment or cancel notice and you think you paid the bill. We’ll work on your behalf to get things straightened out… BEFORE your insurance lapses.

Posted in Auto Insurance, Gannon Insurance | 1 Comment »

Sorry … that’s NOT covered by your insurance!

Friday, January 15th, 2010

In the past few months, I’ve come across numerous articles highlighting the findings of new research by the National Association of Insurance Commissioners. I found the report so shocking that I wanted to get the information in your hands as soon as possible.

Get this

In spite of ALL the publicity surrounding the uninsured flood damage from Hurricane Katrina, we’ve discovered that one out of every three homeowners incorrectly believes that flood damages would be covered by their homeowner’s insurance policy. You need to know that the typical property and liability policy does NOT cover home damage from floods, earthquakes, water line breaks, termites, mold and several other perils.

The NAIC survey further revealed these alarming statistics about homeowner misunderstandings when it comes to common loss situations – none of which are covered by standard home insurance policies – such as:

68% think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered by their Homeowners Insurance.
48% think that Identity Theft is automatically covered.
37% think that damages outside of the home, due to a break in the sewer line that connects to their municipal sewer system, are covered.
35% think damages from earthquakes are covered.
34% think mold damage is covered.
31% think termite damage or damages from other infestations are covered.
22% think pets stolen from or injured on their property are covered.

What you don’t know CAN hurt you!

The more I read the survey results, the worse it gets. Too many homeowners don’t even understand what type of coverage their insurance provides. Twenty-four percent believe their home is covered for Actual Cash Value, 64% said Replacement Cost, and 12% had no idea at all. This is a very important distinction as Actual Cash Value represents only what it would cost to repair or replace damage to your home and contents “after” depreciation (in case you’re wondering…ACV coverage is generally not a good thing).

Spend a little…Save a lot

The survey showed that a significant number of respondents are rightfully more concerned about being sued today than they were five years ago. Although we’ve been suggesting it to our clients for many years, statistics show that most homeowners – 63% – have never added a relatively inexpensive umbrella liability policy to protect themselves against this risk.