Cost of dropping auto insurance to increase

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.