Expert: Anne - 5/17/2008

Question
QUESTION: When changing the insurance company, there is one week gap between the new and current policy. I wonder how many days of the gap may affect the premium or coverage in the future or the insurance company does not care the gap at all but it is just the driver's risk during the gap?

ANSWER: Hello Ryan,

There should be no gap between the two insurance policies effective dates. If this is the case, you can end up with no coverage. Even if the claim "occurs" after you do have coverage (i.e. your windshield breaks 1 month after you do have coverage), the insurance company will wounder if this really happened during the period you were covered or the period you were not covered. It could become a big pain on the neck trying to show that you did have coverage then.

Most agents will accommodate your needs and make the effective date the minute after the prior policy expires. You would have to pay for the pro -rate time (say if it is one week before next month starts). Usually, moving your coverage to start earlier will only affect your premium for the extra days of coverage and not for the entire period.

If the insurance company does not insured during this time, then they will not charge you any unearned premium (They should not anyway).

Will the insurance company care? Not really, until you have a claim. So yeah, it is just the driver's risk during that gap.

Anne
http://www.spokanelegalhelp.com



---------- FOLLOW-UP ----------

QUESTION: Thank you for your answer. The new insurance has not known the gap. Assuming no accident and claim during the gap and first term, but the new insurance may know the gap when I renew the policy. Will the insurance likely increase the premium just because the insured ever had a gap before?

ANSWER: No, the gap will not affect your premium (Assuming no accident and claim during the gap and first term, but the new insurance may know the gap when I renew the policy(.

Their knowledge of this gap should not affect you one way or the other.

Good Luck.
Anne

---------- FOLLOW-UP ----------

QUESTION: Will and how does the new insurance company know the gap if the insured does not tell and no current insurance declaration page is requested, by the way?  

Answer
Some states (I am not sure if yours does) have systems that show who is insured when. They are helpful in finding possible source of recovery against someone. However, even in those states (Washington is one of them), insurance professionals only look a this data when there is a claim or any indication of fraud. Long after you get your policy and/or your premium is assessed.

If this data base is not in place in you state, then either the agent or the insured (you) would have to say something about the gap. If the agent does not know, and you do not have a claim, then it is very probable that no one would ever know. There is no reason for them to be looking into this.

Good Luck,

Anne.