Gaps, lapses and backdating

Gaps, lapses and backdating

May 28, 2021

A lapse in auto insurance coverage happens when you own a registered vehicle but do not have insurance coverage on it. This can happen for many reasons but lapses almost always end up being bad news for you as an insurance customer.

If your insurance lapses, your insurance company will likely cancel the policy and notify the Department of Motor Vehicles that your vehicle(s) are no longer insured. This could result in fines or other penalties that increase in severity the longer you wait to renew your auto insurance policy.

If you’re planning to be out of the country or not using your car for an extended period of time, talk to your insurance agent about suspending your insurance. Suspending insurance is not considered a lapse in coverage, so you won’t have to worry about penalties or raised rates. Some companies won’t offer suspended policies, but you may be able to avoid legal penalties by filling out and submitting an exemption form with the Department of Motor Vehicles.

Lapses in coverage can also lead to higher insurance rates once you decide to resume coverage. The increase in rates can be between 10-30%, depending on how long you’ve been without insurance coverage. The state of Wisconsin imposes a $60 license reinstatement penalty if your license is suspended due to lack of insurance. This adds up to hundreds of dollars annually, so it’s best to keep your auto insurance policy current if at all possible.

If you do have a lapse in coverage, make sure you renew coverage before driving your car. Driving without insurance can lead to huge liability in the event of an accident and could bring additional fines if you are caught driving without insurance. While auto insurance can be expensive, your agent can help you design your policy so that your payments are as low as possible if money is tight.

Backdating a policy is the same as saying a vehicle was insured before coverage was purchased. No reputable auto insurance company will offer a backdated policy. Doing so would bring liability consequences for the insurance company, so don’t expect to get a backdated policy. Instead, make sure you plan ahead and get your vehicle insured as soon as you purchase it.

When you’re ready to switch your homeowner’s insurance, give us a call! We’ve been helping clients save money and protect their homes for decades. Our team can make the insuring process smooth and painless so that you can live worry-free. To reach us by phone, call (715) 754-5254 or (920) 822-3695. You can also email us at or visit to learn more.