Stopped paying your insurance bill? It could cost you – Corpus Christi, TX | KRISTV.COM |

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According to Timothy Gaspar, an insurance agent with FMS Financial Partners in Encino, Calif., a policy lapse will almost always have negative consequences for the insured regardless of the type of coverage.

With auto insurance, which is required by law in all but two states, the consequences for letting an insurance policy lapse can be pricey. "Many auto insurance companies give consumers a discount for what they call ‘persistency,’ which is a discount for the amount of time you have had continuous insurance," Gaspar explains. "If you let this coverage lapse, the persistency credit will disappear, causing an increase in your rate."

Letting a homeowners insurance policy lapse can lead to even more serious financial jeopardy. Most preferred carriers will not accept a homeowner whose coverage has lapsed, and homeowners who fail to pay their premium for more than 45 days may be limited to a high-risk policy.

"I’ve had clients who let their homeowners insurance lapse for three or four months and suddenly find themselves unable to get coverage with anyone but a surplus lines carrier," said Gaspar. "It can really turn into an ugly situation."

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Stopped paying your insurance bill? It could cost you – Corpus Christi, TX | KRISTV.COM |

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