Can you get car insurance if you owe another company?

As a consumer, it’s important to build a good reputation by paying your auto insurance bills on time. If you’re paying for a service or you’re financing a product, failing to make the agreed-upon payments by the due date could have a serious effect on your creditworthiness.

Can I get car insurance if I owe another company? In some markets, you might not even be able to enter into a new contract with a new company until you’ve fulfilled the old obligations you’ve agreed to.

It can be scary to think that letting an old auto insurance policy lapse could affect your ability to get insurance. Because auto insurance is a mandatory financial product that you’re required to have, it’s important that you maintain a reputation as a good insurance consumer. Lapses in coverage can disqualify you from some insurers, so don’t let that happen. Can you get auto insurance if you owe another company? It might be possible.

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Average Car Insurance Rates by Top Companies

Did your car insurance policy recently get canceled? Before you make a decision on where to go for car insurance, look at how the average rate for car insurance from the top 10 companies in the United States.

USAA, Geico, and State Farm are the three most affordable car insurance companies in the nation. Progressive is close to the median, but closer to the expensive side of car insurance. Allstate, Liberty Mutual, and Travelers are the most expensive car insurance companies.

Your car insurance rates could vary because car insurance rates are based on where you live, what you drive, age, credit history, and driving record. Policy discounts can save you money, though. During the COVID-19 pandemic, you’ll need all the help you can get.

Watch this news report on how car insurance discounts can help you during the COVID-19 pandemic.

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You Have the Right to Purchase Auto Insurance

If you own a car in your name, you have to insure the vehicle with at least a minimum amount of Property and Casualty coverage. Since having insurance is the law, you have the right to buy coverage as long as your license is in good standing.

If you’ve ever been canceled for non-payment, it can affect your rates but not your ability to find coverage.

If you’ve let your policy cancel in the past, it could affect where you can buy your coverage. Some carriers have extremely strict guidelines in place that prevent people with a bad consumer reputation from getting insurance.

These companies usually only sell coverage to drivers who fall into the preferred risk class.

You might not be able to buy coverage from a preferred carrier, but there are standard carriers who are willing to sell drivers with spotty insurance histories coverage.

If you have a spotty insurance history and also a spotty driving record, you’ll have to find your coverage through a high-risk car insurance company insurer that charges more for insuring the high-risk market.

Know What the Consumer Bill of Rights Does For You

Every state has a Consumer Bill of Rights that pertains to your rights when you’re shopping for auto insurance and when you have a policy in force. Insurance departments take the time to write the bill so that all consumers know when their rights are being violated.

The bill protects you from predatory practices that are illegal in the industry. Here’s a list of some of the rights all U.S. consumers have, according to New Jersey law:

• You have the right to buy insurance
• You have the right to change your insurance
• You have the right to choose from different coverage options
• You have the right to get a timely response
• You have the right to prompt claims processing
• You have the right to file an appeal
• You have the right to cancel your insurance
• You have the right to receive written notices in advance

Now that you know your rights, you need to take some time to learn how auto insurance premiums are billed. When you buy your coverage, the carrier is going to ask you to make at least a small payment.

Some carriers will ask for a month down and others will take a two-month deposit. Either way, you’re obligated to pay before your coverage takes effect. Future premiums due on the policy are billed much like the first payment. You’re required to pay the premiums upfront before your coverage is provided.

As long as you pay the monthly, quarterly, semi-annual, or annual premium payment, you’ll have coverage for that entire period until your next payment comes due.

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What happens to your policy if you don’t pay your premiums on time?

If you don’t make your premium payments on time, your coverage will terminate. Some companies won’t give you any extra time to make your payment and others will give you a grace period.

You’ll have to check with your agent to see if there’s a grace period before you assume that you can make late payments without having a lapse in coverage.

Since your premiums are billed upfront before your coverage is afforded, it’s not easy to get in debt with an insurer. When you don’t pay the company, they don’t just add a late fee and let you pay the next month.

You’ll lose your policy entirely for not paying. You could get a small bill for the fees charged by the insurer, but it won’t affect your insurance history.

If you do receive a notice advising you that you owe a fee, you aren’t going to be denied coverage for it.

Insurance companies can see many things about your past policies and your past infractions, but they can’t see your premium invoices or the dates that you’ve made your payments in the past.

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How can a lapse affect your future auto insurance premiums?

If you owe your last insurer fees, it won’t affect your future relationships. It’s having a lapse of coverage that’s really going to make an impact on what you pay. You might not see a lapse of insurance as a risk, but other carriers see this as high-risk behavior.

Sometimes, but not always, having no prior insurance makes you a high risk. Finding car insurance isn’t very difficult in today’s technologically advanced time. Now, you can do all types of business via your home computer.

If you want to find the best rates for insurance, even if you do have a spotty past, be sure to use our FREE comparison tool! Enter your ZIP code to begin!

Can I Get Car Insurance If I Owe Another Company and Other FAQs

Let’s recap with a few frequently asked questions that appear on the internet.

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#1 – I owe an insurance company money. Can unpaid car insurance go to collections?

Yes. In addition to canceling your car insurance policy, you’d be in debt with the car insurance company with an unpaid bill. If you don’t pay, the car insurance company will report it to collections. Reporting to collections will hurt your credit.

#2 – Can you put insurance on a car that you don’t own?

Yes. Non-owner car insurance will allow you to insure a car that someone else owns.

#3 – Do insurance companies check if you had insurance cancelled?

Yes. Car insurance companies will check your insurance credit history, which alerts the company of how many claims you’ve had in the past seven years and your payment history.

#4 – What happens if you lose insurance on a financed car?

The lender of the financed vehicle will likely enroll in force-placed insurance, and then add the premium to the loan payment each month.

#5 – Why is my insurance more than my car payment?

When car insurance payments are more expensive than your car payment, it means your deductible is too low and your coverage is too high.

#6 – Can two people own a car together?

Yes. Two names can be on the title. Be advised, the person selling the car doesn’t need permission from the other co-owner to sell the car.

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