By law, a person must have automobile insurance across the nation. At one time, a person could skip paying their insurance premiums without much trouble. That is no longer the case. Dropping your auto insurance can cost you an arm and a leg and possibly your car. With advances in technology, insurance companies are actually tied into your state’s Department of Motor Vehicle Department who issues licenses and registrations for your cars.
History of Car Insurance:
It was once that you could go in and buy an automobile policy and pay a one month premium and receive a card for your car that states you are insured for the next six months. When money was tight, car insurance premiums was one of the first things a person would drop. It was not a problem, because if they were stopped by a police officer for a traffic violation, the uninsured driver could show them the proof of insurance card and then go about their business. That has changed and could cost you today.
Car Insurance and Computers
Today, the insurance companies are linked into the state’s Department of Motor Vehicles. If you do not pay your premium and the policy is canceled by the automobile insurance company, the insurance company sends a flag to the MVD. The MVD is aware of your non-compliance with the law almost immediately. They will send you a letter to renew your insurance or that they will cancel the registration of your automobile. You will usually have a short grace period to take proof of your car’s insurance to your local MVD. If you do not, your car’s registration will be terminated.
Reinstating your Car’s Registration.
If the state cancel’s your car’s registration, you are in for some headaches to get it reinstated, and, of course, they hit you right in your wallet. In New Mexico, you have to get proof of insurance by purchasing an automobile insurance policy. You take the proof of insurance to your local MVD. They check their computer records to ensure that the policy is genuine and in force. They then charge you $30 to re-instate your registration plus charge your for a year’s registration. In Utah, the fee is $100 to re-instate the registration plus the normal registration fee.
The Cost of Automobile Insurance:
Policies vary from company to company. If you have let your car insurance policy lapse, you will pay higher premiums to start a new policy. It will take you about six months of paying your automobile insurance premiums on time before you will qualify for a lower premium. Most automobile insurance agents will not automatically put you in the best rate. You will need to continually shop around until you find the best deal possible. After a year, you should find a good agent and Insurance company. When you do, use this same company for all your insurance needs to receive the highest discounts you can qualify for.
Having a car is a necessity for most of us as public transportation is not always available. Keep your car insurance up to date to save yourself time, money and headaches.