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Dear Footloose:
In the past, insurance companies often rated those who had a lapse in their coverage the same as brand-new drivers, and charged them higher premiums as a result.
However, this is no longer the case in most jurisdictions. (The exception would be if the lapse was due to cancellation of your policy for failure to pay the premium, an accident or conviction that was not reported to your insurance company that would have resulted in higher premiums, or suspension of your driver's licence as a result of a conviction related to the use and operation of the vehicle, like impaired driving.)
Nonetheless, there are certain steps you can take to make it as easy as possible to resume your coverage when the time comes.
First, consider returning to your previous insurance company or to a company with which you already have a history -- for example, your property insurer -- when you re-apply for automobile coverage. Contrary to the old saying, familiarity DOESN'T breed contempt when it comes to insurance, as long as you have a good driving record.
In order not to be rated as a new driver, you will need to prove that you had prior insurance. Therefore, it's a good idea to ask your current representative for a letter stating your policy number, insurance company, length of time insured, date of termination and claims history, or retain a copy of your last insurance policy and mark the termination date on it. If, for example, the lapse in your coverage was due to having driven in France while you were there on sabbatical, you should bring written proof of insurance from that country.
You might also want to prepare a letter in duplicate explaining why you are letting your coverage lapse. Have your representative sign both copies, and leave one copy with your file.
If you cover all your bases before you sell your car, you won't need to worry about resuming your coverage later on. Think of it as getting your walking papers!
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