Canceled? Try for reinstatementIn general, even if a car is totaled and not drivable, you should keep insurance on the vehicle until all claims are settled. (See “ Can you cancel your policy after an accident?”) Your friend should not only now contact his car insurance company to make sure his policy was valid on the day of the accident and that the insurer will accept claims, but also to see if there is a way to reinstate his policy. Many car insurance companies will reinstate an auto policy that has been canceled due to non-payment as long as the lapse in coverage with them has been less than 30 days and there have been no losses during the time you were without coverage. For a reinstatement of your friend's policy to be possible, he'd normally be required to sign a statement of no loss. A no-loss statement 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. This is done so motorists clearly understand that they can't make a claim for anything that occurred during the lapse in coverage. Losses that occurred before the lapse, when the policy was still valid, or once the policy is reinstated, would be covered.
Tell your friend to get his policy reinstated quickly. Depending upon state laws he could be penalized if he doesn't have insurance on his car and also it can be harder (and much more expensive) to get an auto insurance policy after a lapse.Car insurers typically give better rates to drivers who can show they've carried continuous coverage, so your friend will likely need to shop around to get the best car insurance rates possible if his previous insurer won't reinstate his policy. Even with a lapse in coverage, comparison shopping can help you save money. (See “ Pocket $1,102 just by shopping around”)