Having valid automobile insurance is a neccessity by law. Even when your car remains in the garage for long periods of time, the insurance should remain valid.  The insurer may provide a discount on the premium when you confirm that the car would never be used for a specific period of time like a foreign trip or a temporary relocation to another city. However, it is important that you keep your insurance up to date, especially because you can never predict when accidents will occur.

 Inspite of the legal provision, if you are involved in an accident and your insurance has lapsed, you could potentially be in deep trouble with the law enforcement agencies and in discharging the financial liabilities consequent to the accident. Understand that a lapsed policy offers you no protection whatsoever. You may invent a series of reasons for not renewing your policy but that seldom helps. Most insurers will remind you in good time to renew the policy and trouble comes only when you ignore those reminders.  In some instances, insurance companies allow a grace period and if the accident occurs during the grace period, you stand a good chance of remaining protected.  But, insurers are not obliged to grant this grace period and you cannot demand it as a matter of right.

 The financial implications

 In a car accident where you are at fault,  failing to renew your insurance might result in hefty payments from your own pocket.  At times, this could be far worse than you could imagine.  An exception to this situation is when you are injured and the other driver is at fault.  In this instance, you are not at fault and the liability is not on you.  Therefore, even if your own insurance has lapsed, you would still be in a position to claim relief and receive an appropriate award.

 Serious consequences even without an accident

 You should also be aware of the other dimensions of driving with a lapsed insurance. Even without an accident, a routine check by the law enforcers can land you into deep trouble. Many states have stringent laws on this and your car can be impounded. Additionally, you could even be jailed for the offence.

 Better option

 The better option before you is to renew your car insurance in time and avoid all the possible embarrassment.  In modern times, it is never difficult to remind yourself of upcoming due dates and send off a check well in time.  You can use the grace period when available or simply send in a renewal request. 

 There are a number of  consequences of driving with a lapsed insurance. In the first place you run the risk of paying a much higher premium when you seek a renewal or a new insurance subsequent to an accident in which you are cited for lapsed insurance.  Depending on the extent of damages and/or injuries caused and the liability to you, the financial consequences can be overwhelming. Apart from these, your driving record will also carry a citation for driving with a lapsed insurance making it difficult for you to obtain a competitive quote for future car insurance.

 Look at it from any angle; the disadvantages of driving with a lapsed insurance far outweigh the small savings you obtain from delaying the renewal. As a matter of fact, you would even end up paying more money while renewing a lapsed insurance because you will lose most of the loyalty bonuses and attract a penalty for belated renewal.