Stay Protected: Understand the Reinstatement Clause

What Is a Reinstatement Clause?

A reinstatement clause is an insurance policy clause that allows the policyholder to reinstate or restart their policy after it has lapsed. This means that if you have let your policy lapse, you may be able to start it up again without having to go through the process of getting a new policy.

Reinstatement clauses can be beneficial if you have had a lapse in coverage for a short period of time and can prove that you have been a responsible driver. However, if you have had a lapse in coverage for a long period of time or have had multiple violations, it is unlikely that your insurance company will allow you to reinstate your policy.

It is important to note that even if your insurance company does allow you to reinstate your policy, you may have to pay a higher premium. This is because insurance companies view drivers who have let their policy lapse as high-risk.

If you are thinking about letting your policy lapse, it is important to contact your insurance company to see if they offer a reinstatement clause.

What is a reinstatement example?

A typical example of a reinstatement clause would be as follows:

If your policy has been canceled for any reason, you may reinstate it within 60 days of the cancellation date by providing us with evidence of continuous insurance coverage during that period. If you do not provide us with evidence of continuous insurance coverage, you will be required to complete a new application and pay any applicable fees.

This clause would allow the policyholder to reinstate their policy within 60 days of it being canceled, as long as they can provide evidence of continuous coverage. If they are unable to do so, they would have to apply for a new policy.

It is important to read your policy documents carefully to see if your insurance company offers a reinstatement clause. If they do, make sure you are aware of the conditions that must be met in order for your policy to be reinstated.

Bottom Line

A reinstatement clause is an insurance policy clause that allows the policyholder to reinstate or restart their policy after it has lapsed. If you are thinking about letting your policy lapse, make sure you contact your insurance company to see if they offer a reinstatement clause.

Reinstatement clauses can be beneficial if you have had a lapse in coverage for a short period of time and can prove that you have been a responsible driver. However, if you have had a lapse in coverage for a long period of time or have had multiple violations, it is unlikely that your insurance company will allow you to reinstate your policy.