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When you’re running a household, you’re also in charge of budgeting and dealing with insurance things. This includes car insurance for many families.
Car insurance can be an area of confusion for a lot of people. If done right, you can save money and put it toward other areas of your budget. One area of car insurance people often don’t understand and may have questions about is backdated premiums or backdated insurance policies. Will my policy cover approved AAA body shops? Will my payment be delayed? Can I even do this legally?
Below is an overview of everything you should know about the concept.
What is Backdating Insurance?
Typically, when you purchase car insurance, you get protection if you are involved in a car accident and incur losses. If you have an accident, your insurance company will pay for certain costs.
Some people wonder what would happen if they didn’t have insurance, and they may inquire about backdating insurance. Then, theoretically, the insurance provider would pay the claim anyway.
Is this an option?
While you can always ask, the answer is typically no. Backdating a policy isn’t something a reputable car insurance provider is going to do.
The situation we’re discussing assumes an accident has already occurred. This would be a massive risk for a car insurance company to backdate a policy in that instance.
What about other situations?
Sometimes a car insurance company may backdate coverage if you have a No Known Loss Letter.
What Is a No Known Loss Letter?
In certain situations, if you’ve had an insurance policy canceled because you haven’t paid it, then you may want to reinstate it. In that case, your insurance provider may want you to sign a No-Loss letter before they’ll restore your policy.
That letter states that there were no known claims during the insurance lapse.
This is a very different situation than getting into an accident and hoping you can get coverage after the fact.
With this letter, you are asking the insurance company to reinstate your policy instead of getting a new one.
The primary condition of this reinstatement is that you haven’t had a claim during the period you weren’t insured.
The idea behind car insurance is to protect drivers from losses stemming from car accidents. But what if you didn’t have coverage? Is it possible to backdate your car insurance? Keep reading to find out! Click To TweetThe differences between not having insurance and getting in an accident and having a lapse in your policy with no accidents or claims are significant in an insurance company’s eyes.
It’s up to the discretion of an insurance company whether or not they want to reinstate your policy, however.
You must realize that there’s no benefit for the auto insurance company to backdate a policy. If you’re a long-time customer and something happened that led your coverage to lapse, then maybe, but still probably not.
If an insurance company agrees to reinstate your policy after a lapse in coverage, they will usually only do it if the lapse period is no more than 30 days.
Is it Fraud?
Something else to be aware of is that in some states, the concept of backdating an insurance policy is considered fraud.
Backdating Other Types of Insurance
Sometimes people get confused about backdating car insurance because it’s not as frowned as other insurance types.
As an example, maybe you have life insurance, and you didn’t pay your premiums. The policy lapsed, so you’d like to reinstate it. Unless you’re trying to get coverage for someone who’s just died, there’s no risk there for the insurer.
If you’re in a situation where you’re wondering about backdating an insurance policy, if it’s car insurance, it’s probably not going to happen. Backdating would be something an insurance company would be doing in your favor as the driver and consumer, and that’s not necessarily what these companies are out to do.
The only way you may have a chance of backdating is if you didn’t pay your premium. Perhaps your policy can legitimately reinstate your coverage in certain situations, but the lapse couldn’t have exceeded 30 days.
The better option is to compare car insurance on Money Expert and see what you can easily afford. This way, you’ll avoid the risk of not being able to pay and face a lapse in coverage.
Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.
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This is great information for me. I did not realize some of this. Car insurance is so important for each of us. You never know when something will happen. Thank you so much for sharing
I totally agree. All types of insurance are very important and something everyone should have
This is some great information on car insurance that I did not know. Very useful. Thank you so much for sharing
I’m glad you found this information about car insurance useful
Is this even legal?
Insurance is a contract that goes into effect…the day it is signed or paid for.
You can ask to backdate car insurance but the answer is usually no.