What are the benefits of reinstating an insurance policy instead of buying a new policy?
Reinstating a policy without a lapse means you have continuous coverage and will not incur a fine or be required to maintain an SR22. This is usually an option if you are within 30 days of the cancellation date and you have not had an accident. Most companies will require you to sign a “Statement of No Loss” and pay a reinstatement fee but the reinstatement fee is a lot less than the penalities imposed by DMV.
A lot of clients ask why can’t I just purchase a new policy and avoid paying the reinstatement fee and past due payments. The answer is you can however your drivers license may be suspended, you will incur fines from the DMV and you will have to maintain an SR22.
In almost every case, it’s always better to reinstate an exisiting policy if possible.