Last updated: January 2023
No Loss Statement & Car Insurance Reinstatements
You and your loved ones don't want to drive without the safety net of an auto insurance policy, but sometimes life can get in the way of keeping that coverage up-to-date. If your insurance policy has been canceled you may want to try to reinstate the policy without a lapse in coverage.
Why request reinstatement without a lapse?
There are many reasons why a policyholder would want to restore his or her cancelled policy without a lapse in coverage, including:
- maintaining compliance with your state's financial responsibility requirements;
- complying with your lienholder's insurance requirements;
- and/or establishing or building your history of continuous coverage (which could lead to lower insurance premiums in the future).
You should know that not all insurance companies offer reinstatement of automobile insurance without a lapse in coverage. Those that do will likely require you to provide a “no loss statement” before deciding whether or not to grant your request.
What is a “no-loss statement?
A no-loss statement is a statement signed by you in which you represent and promise that you have not had any loss or claim (either liability or property damage) between the time your policy canceled and the time you're applying for reinstatement (your “lapse period”).
Think of it like a signed testimonial that you haven't been in an auto accident or had any damages to your vehicle during your lapse period. In addition to the no-loss statement, your carrier will likely require you to pay all past due amounts, including any applicable fees (and there may be other terms and conditions).
Why would an insurance company ask you to sign a no-loss statement before reinstating your policy without a lapse?
Unfortunately, some drivers who let their insurance policies cancel and then have a loss will try to get their claims covered. That's just not the way insurance works and in certain cases that could amount to insurance fraud.
As you might expect, an insurance company will not restore a policy without a lapse if you had an accident while the policy was cancelled. They may, however, allow you to purchase a new policy. By signing a no-loss statement, you are telling the insurance company that you did not have any claims and will not be attempting to make any claims that occurred during your lapse period.
Remember, your agent can help send your request for reinstatement to your carrier, but only your insurance company has the authority to restore your policy. If you need to reinstate your policy or would like to know more about no-loss statements, please call one of our friendly agents at 1-877-GO-DIRECT.