What Are the Risks if Auto Insurance is Suspended or Canceled During the COVID-19 Pandemic?

Severe restrictions on travel, health fears and closed workplaces have sharply curtailed automobile traffic during the COVID-19 pandemic. Accidents have dropped so much that many auto insurance companies are providing refunds to policyholders. People who are stuck at home and facing financial distress might be tempted to cancel or suspend their coverage. However, if an accident occurs, serious trouble could lie ahead if you or the other driver lacks proper insurance.  

In a time when many people are struggling financially and quarantine orders cut back automobile usage, it seems more likely that motorists might give up their coverage. This raises several issues, such as:  

  • Alternatives to cancellation During the pandemic, many companies are open to helping out customers with payments. Your car insurer may grant a temporary suspension of payment  that reduces or eliminates coverage while a policyholder is not driving, but permits him or her to resume coverage later at the same rate. This differs from a lapse in coverage that might lead to higher costs when a driver looks to resume their insurance.
  • Potential consequences when someone lacks car insurance Without car insurance, a driver might be personally responsible for any damage or injuries suffered by others or themselves. These medical costs could run into the tens or hundreds of thousands of dollars if the collision results in a serious injury. In addition, many states require car insurance by law and may ticket or fine drivers for not having insurance. Other jurisdictions prevent personal injury recoveries for those who lack auto coverage.
  • Recovering damages from an uninsured motorist — After being hurt by a driver who is uninsured or lacks sufficient coverage, obtaining proper compensation for the harm you’ve suffered might be difficult. In numerous states, individual drivers are required to have uninsured motorist coverage to address medical costs in these situations, but that might not cover the entire medical bill.

If you have been hit by a driver who is uninsured or have been in an accident and are unsure if your insurance coverage applies, a knowledgeable automobile accident attorney can help you understand your options and represent you in claims matters as well as litigation.

Contact an experienced auto accident attorney for a consultation       

Noel E. Schablik, P.A. represents clients in auto accident cases and other vehicle collision litigation. Please call 973-402-9596 or contact the firm online to make an appointment.