A lapse in your insurance coverage, whether it be life, auto or home insurance, happens when you fail to make the required premium payments that keep your policy active. A lapse in insurance can have a significant impact on your ability to make a claim on your insurance policy should you need to.

Policyholders should always try to safeguard themselves from anything that may threaten a potential claim for needed compensation. Concerning lapses, in most cases there is a grace period that allows you to rectify your policy before if goes into default.  Take for instance your car insurance.  There are many reasons for wich a person might allow their car insurance to lapse, such as an error or oversight in paying; a change in living circumstances; or the inability to afford the payments, etc. Whatever the reason, there are consequences for a lapse in car insurance. If you allow your insurance coverage to lapse, even unintentionally, you will not be covered for damages if you are involved in a car accident and will have to personally cover the costs. You will also likely face a significant fine for driving without insurance in Ontario.

One of the biggest myths about a lapse in insurance has been that your rates will be targeted and increased after a gap/lapse in payment.  This was dispelled by the Financial Services Commission of Ontario. The Commission issued a bulletin concerning the regulations on lapses in automobile insurance coverage.  Specifically, Ontario Regulation 664 was introduced, which prohibits insurance companies from using a lapse in insurance as a variable when calculating and implementing premiums/rates.

You should never allow your insurance policy to lapse for any period of time.  At Burn Tucker Lachaîne, we see the serious consequences of failing to make premium payments, and the impact of those consequences on individuals and their families.

Here are a few ways in which you can protect yourself and your loved ones from falling victim to a lapse in insurance.

• Read over and remain aware of the details of your policy. Do not file it away without reviewing it.  

• Always inform your insurer of changes in your information, such as a change of address or additional drivers.  Some changes can void your insurance if your insurer was not made aware of them prior to an accident.

• If possible, you should set up an automatic billing payment plan/automatic monthly bank draft. This ensures that premiums are paid without you needing to remember.

• If you have questions about your insurance polict, consider consulting with a lawyer who specializes in insurance matters.  He/she will be able to give you expert advice on your legal standing as a policy-holders.

• Educate yourself. You can also consult reputable websites, such as the Financial Services Commission of Ontario website, to learn more about insurance and the insurance industry.

If you or a loved one was injured and you have any questions pertaining to your rightful compensation, give Burn Tucker Lachaîne a call or visit us online and get the answers that you require in making the best decision for your family.