This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Your Car Insurer Will Not Backdate Your Policy





Question: I was told insurance companies won't backdate auto insurance, Why?  I was hoping to shop around and find someone that will offer me a backdated policy.

Answer:  Backdating a car insurance policy is frowned upon by auto insurance carriers, not to mention considered insurance fraud in some states.  No matter how long you shop around for a backdated auto insurance policy, no reputable and honest auto insurance company will offer it to you.

Why is backdating in the auto insurance industry a big no-no?  It would put the insurer in a very precarious place.  Saying that the auto insurance policy was in force before the actual date of purchase has potentially large liability consequences; it would leave auto insurers open to claims and other issues dating back before the time they agreed to accept you and your vehicle for coverage

If backdating were acceptable, then what would stop drivers from purchasing car insurance only after it was needed due to an accident?  Auto insurers would have no adequate way to assess risk since they could be paying for damages done before they even took on the person as a policyholder. Car insurance rates for all policyholders could be affected and spike upward.

Backdating of other types of insurance, such as life, is generally acceptable because the risk the insurer is taking on hasn't normally changed from what it would have been a month or two ago-- unless you are trying to take out coverage on your father who just died, in which case that would be insurance fraud as well.

While you can't get a backdated car insurance policy, you may be able to paper over a lapse in coverage by getting your old policy reinstated.

If you lost your auto insurance policy due to non-payment, then many car insurance companies will reinstate your policy, as long as the lapse in coverage with them has been less than 30 days and there have been no losses.  For a reinstatement of your policy to be possible, you'll be required to sign a statement of no loss. 

The no-loss form has you certify that there were no losses, accidents or circumstances that might give rise to a claim during from the cancellation date to the reinstatement date. Thus, it's made very clear that if you try to make a claim for anything that occurred during this time period it would be denied.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,975.07 -59.86 -0.33%
S&P 500 2,101.13 +0.73 0.03%
NASDAQ 5,015.6680 +21.0660 0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs