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Cost of dropping auto insurance to increase

Posted June 25, 2008

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— Penalties charged to vehicle owners who repeatedly drop liability insurance coverage will increase July 1, officials said Wednesday.

The change will affect vehicle owners who have numerous insurance lapses within a three-year period. The new rates will be $50 for no previous lapses within three years, $100 for one lapse and $150 for two or more lapses.

The new law, passed by the General Assembly in 2007, is the first change in the insurance lapse penalty of $50 since 1957.

Insurance companies are required to notify the state Division of Motor Vehicles within 20 business days after they issue a new or replacement policy, terminate a policy or reinstate a policy. When a policy is terminated, the DMV sends a letter to the vehicle owner, requiring his or her response within 10 days.

Resulting actions are based on the vehicle owner’s response and his or her record of accidents and financial responsibility. Owners may face a combination of penalties or revocation of vehicle registration.

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  • Madonna Jun 25, 2008

    This is annoying but don't let it stop you from getting competitive quotes on your insurance. After making a switch last year, it feels good not to be paying State Farm's bloated rate.

  • whatelseisnew Jun 25, 2008

    Can you say illegal alien? That is the group that does this the most. So first the cost us higher uninsured rates for that insurance, and now this. Thanks Mike easley for creating this problem.

  • SOCLOSE Jun 25, 2008

    So does this mean that if I have had the same insurance company for several years and just decide to change to get a better rate I will be punished by a $50 fine?

    As long as you do not have a lapse in coverage you should be OK.
    Well I just changed co's and Progressive sends me a bill for $95. Saying, that by law they had to maintain coverage for me for an xtra 10 days. Now how does that add up to $95? And why is this the first time I've ever heard of this "law"?

  • Doddlebug12 Jun 25, 2008

    So does this mean that if I have had the same insurance company for several years and just decide to change to get a better rate I will be punished by a $50 fine?

    As long as you do not have a lapse in coverage you should be OK.

  • hdsoftail Jun 25, 2008

    You drop your insurance and go to another company it should't affect you. Just remember: State Farm will REAM YOU GOOD!!!

  • xxxxxxxxxxxxx Jun 25, 2008

    So does this mean that if I have had the same insurance company for several years and just decide to change to get a better rate I will be punished by a $50 fine?

  • enoughsenough Jun 25, 2008

    Good to hear that they are getting tough on people who don't pay their premiums. I know that money is tight w/ many people, but there alot of folks riding around w/ no insurance. I know because I was hit by one. My car was totalled, but thank God I had under/uninsured motorist protection. If you don't have it, then you better get it. The girl that hit me didn't have insurance for 8 months, but the cop on the scene said DMV was showing that she still had insurance. DMV wasn't doing their job. I was also injured in the wreck, but my insurance paid the car off, paid my medical bills, and paid me for my pain.

  • bs101fly Jun 25, 2008

    poo on that, SUE ME!

  • 68_polara Jun 25, 2008

    Some progress but it's still cheaper to pay the $150 than to buy and maintain insurance for those that have a bad record. What confuses me is that from what I understand insurance companies can only consider a drivers the past three years infractions. So how bad could anyone's record be that they think they can't afford minimum insurance? Are DUIs older than three years be considered when determining insurance rates? Anyone know?

  • Kurlley Jun 25, 2008

    That is totally "bull-hockey"