Can Car Insurance be Backdated?

  • Post category:Insurance

There are several reasons you may wish you could backdate your car insurance coverage. Maybe you just got into an accident and you didn't have any insurance. Another reason is that you wish you would have taken out more comprehensive coverage because something isn't being covered during an accident. Both of these can be stressful situations and extending your coverage backward might seem like a solution. But is it even possible?

No, you can not backdate your car insurance coverage. No car insurance companies in good standing would agree to backdate your insurance policy under any circumstances. Backdating a policy is saying that your vehicle was covered by your policy before the date you actually purchased the coverage, and that would not be correct.

A collage of a car owner talking to the insurance agent and an insurance agent checking the car, Can Car Insurance be Backdated?

Car insurance policies can be difficult to manage and it's not always easy to understand what can and can't be done. This post will go over everything related to backdating car insurance so you can be well informed going forward.

Why Won't Insurance Company's Backdate Your Car Insurance?

The basic reason why car insurance won't agree to backdate your car insurance is that it's dishonest. Auto insurance is meant to cover you in case you get into accidents. It's not meant to be purchased after the fact, and doing that would defeat the whole purpose. It would be unfair to every other customer that pays premiums every single month. Backdating auto insurance policies would also make it hard for state authorities to catch people driving without the required level of car insurance.

It's also financial damaging for a car insurance company to enter into an agreement like backdating insurance. The company would be entering into a contract with you knowing that it would be likely you're asking for a backdated policy because you've had an accident. This would mean that the insurance would have to immediately offer you a pay-out.

What is a Statement of No Loss?

There is one condition that a car insurance company can do something similar to backdating your coverage date. If you can't afford your insurance or your coverage lapses for a while your insurance carrier can offer to cover the lapse of time. The reason this form of backdating doesn't help with accidents is that you have to fill out a Statement of No Loss. This form says that you did not have an accident or a loss during the lapse.

Will Anyone Do It?

Maybe. Though it is uncommon and in some states even illegal, you may find an insurance company that is willing to start a backdated policy. To find a company that will backdate your coverage and not requires a Statement of No Loss is even more exceedingly rare. You should be skeptical at first of any legitimate offer to backdate car insurance. You may enter into insurance fraud and incur criminal charges.

Backdating other types of policies like health or life insurance is generally acceptable because the risk the insurer is taking on doesn't normally change from a month or two ago. They would be covering the same basic circumstances.

Why Would You Want to Backdate Your Car Insurance?

Sometimes it can be difficult to keep up with car insurance monthly premiums. It may seem like there are more important bills to pay than car insurance that you haven't used actually needed in years. Because of this, it's not uncommon for people to lapse out of car insurance coverage and be without insurance. This is risky and any accident or property damage you incur can be financially ruinous.

Whether you're in one of these no-coverage periods because you thought you could get away with it or you missed your bills for a few months, you may wish you could find backdated coverage if you have an accident. It would be a shock and the consequences would obviously push you to try everything at your disposal to find a policy that would backdate your coverage and cover your accident.

Another less pressing reason you may be wanting to backdate your car insurance is if the coverage your purchased was not enough and you still owe a lot of money after an accident. Maybe you chose to pay your premium on a bigger deductible. Now you've had an accident and wish your deductible was lower. This type of backdating also general can not be backdated. It can only be added midway into your billing cycle and pro-rated.

Can I Get Insurance the Same Day I Have an Accident?

You can buy car insurance the same day that you have an accident, but the policy will not cover the accident you just had. At best, your claim will be denied or dismissed, and at worst, you could be charged with insurance fraud. Car insurance fraud costs everyone because it inflates the amount of claims insurance companies pay out and increases the premiums for everyone. It's illegal and you should be very careful to play things safely with insurance. Always ask your reputable agent about the best times and ways to do things like file claims or change policy dates.

The insurance companies have a record of when in the day you purchase a policy. They may go as far as reviewing your claim. Once they try to corroborate your details with the police department that files your accident, they will notice that you didn't yet have coverage. It's also not helpful because the police will ask to see proof of insurance at the time of the accident. If you don't have it with you at that point, you will incur some charges because in most states, not having car insurance is illegal.

Are All States the Same?

Though there is no accepted standard for backdating insurance in any state, some will go the extra mile and make the activity entirely illegal and subject to criminal charges.

Can You Get Retroactive Car Insurance?

No, retroactive car insurance would be the same as backdated insurance. Car insurance is designed to be purchased in advance of any possible claims and to use it for other purposes is not legal.

Can Insurance Companies Back Date Premiums?

Car insurance companies cannot backdate premiums if they can't backdate coverage. You may have pro-rated premiums in your first month. If your monthly premium is $200 per month, and you start your policy in the middle of the company's billing cycle you would pay $100 for that time.

The Better Choice Is to Be Prepared.

The whole conversation about backdating car insurance usually comes up when you are uninsured and have an accident. The whole topic is fraught with difficulties and problems. The best way to avoid dealing with any of these is to always have active coverage. If your policy lapses due to non-payment, try to reinstate it as soon as possible. Being uninsured carries several risks and even the tiniest mistake can cause very big financial problems for you.

As is said with most financial advice, it's always best to plan ahead and be prepared. You never know what might happen tomorrow and if you are adequately covered with your car insurance you don't have to worry.