Can my car insurance be backdated?

Can car insurance be backdated? If you’re pulled over by law enforcement, one of the first things the officer will ask you for is proof of insurance.

Drivers who inform the officer that they aren’t insured will be cited not only for the primary violation they were stopped for but also for failing to carry.

Drivers who inform the officer that they aren’t insured will be cited not only for the primary violation they were stopped for but also for failing to carry car insurance required under state law.

If you can prove that you had insurance at the time that the ticket was issued, that charge will be dismissed. 

Unfortunately, you could get yourself in even more trouble by trying to present fraudulent documents. One solution would be to buy a policy with backdating motor insurance. Before you assume this is an option, here’s what you need to know.

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Can you backdate car insurance?

Can an insurance company backdate your policy? In the insurance industry, the term backdating is used to refer to the practice of dating a document or a transaction performed by the representative as a date that’s earlier than the date that the transaction was actually completed.

In most states including the Superior Court of California, it’s mandatory that you appear in court when you’re cited for driving without insurance.

While it’s frowned upon, retroactive car insurance is offered in some rare situations.

Having a backdated auto insurance policy can be difficult to understand by the definition only. Having an example of a backdating endorsement in insurance will help paint you a better picture.

If you were to get a quote for insurance on February 1st and the policy was written to take effect on January 20th, this would be a form of backdating the policy to provide coverage before the coverage was actually requested.

Since backdating isn’t often available, it’s best to avoid a lapse in coverage, to begin with.

A lapse in coverage can potentially more than double your car insurance rates.

Is backdating car insurance legal?

Insurance companies have a lot of freedom when it comes to setting their rates. One of the reasons that freedom is allowed is because states want to keep the marketplace a competitive one.

While it’s the insurer’s choice as to whether to set their rates low or high, companies don’t always have freedom when it comes to dating policies.

Insurance carriers with a state license to sell products must refer to what is and isn’t allowed by the department of insurance before backdating anything.

Many state insurance departments and regulators have made it illegal for carriers to sell backdated policies as a new business transaction. In fact, in these states, agents who backdate coverage can be found guilty of fraud.

Why is backdating car insurance fraud?

Having car insurance is mandatory. If you don’t have insurance, you’re in violation of state law.

What happens when an insurance policy is back dated? Many states consider the act of issuing a policy on a prior date before the date that the applicant applied for coverage as fraud because the driver will be able to verify coverage that they didn’t have with the state after being cited for violating the law.

According to the FBI, insurance fraud costs insurance companies around $40 billion dollars, which tacks on about $400 – $700 per year to the average driver’s policy.

If you’re not sure why it’s fraud when you’re still paying the premiums for the coverage, consider this. By law, you’re required to have your driver’s license to legally operate any car. No matter whose car it is, you must hold a valid license to be an operator.

If you’re cited for driving with a suspended license and the DMV then backdated the reinstatement date of your license to erase the infraction, it would be the same thing as backdating insurance.

It’s also possible that someone who was driving without insurance could have an accident, buy a backdated policy, and then file a claim for their damages on the policy. Since no coverage was available at the time, it’s quite possible that the claim could be called a fraudulent filing.

This could reflect badly on you as the claimant when you’re filing a claim.

Can car insurance agents be charged with fraud?

If your friend sells insurance and you need their help getting backdated policy documents, don’t persuade them to help you or it could ruin their professional future.

When backdating is illegal in a state, any licensed producer who backdates a policy can be charged with fraud.

While insurance agents who are charged with fraud don’t typically face jail time, they can be fined and also lose their professional insurance license. If the agent has a history of backdating policies, there’s a chance that jail time could be an extreme punishment.

Why Car Insurance Companies May Not Backdate Car Insurance That’s Legal

Since backdating a new business policy is an option when there’s a miscommunication or a rare situation there are states where the practice isn’t illegal.

Even if it’s allowed in the state, it doesn’t mean that the insurer will allow it. Virtually no carrier with a good reputation in the industry is going to voluntarily backdate coverage.

Backdating the inception of a policy is a risk anytime it’s done. As soon as a policy is effective and the premiums are paid, the insurer agrees to pay the covered claims that you present.

One purpose of backdating would be to get coverage for a claim when you didn’t have insurance.

That’s why it’s a risk for the insurer to set up a contract saying that the client is covered at a future time.

Beware of Car Insurance Companies Who Backdate

If you’re still on a mission to find an agent or broker who will backdate your insurance, there’s a good chance you’ll find someone who’s willing to do it.

Unfortunately for you, you can’t let your mission to find the coverage that you need cloud your judgment. There are several drawbacks to signing up for a backdated policy:

• The insurer who will offer the service typically isn’t reputable and may not have their license to sell insurance in your state
• The insurer will more than likely have a less than satisfactory financial standing and could have difficulty covering future claims
• The carrier may charge you for past premiums and a fee that will raise your insurance expense higher than the cost of a DMV-issued fine

You may be required to sign something saying that you won’t file a claim for the backdated period even though you’re paying for coverage. That might not be a great deal for you.

Backdating Existing Car Insurance

Can you backdate coverage on a new car if you already have existing insurance?

If you already have existing insurance, backdating coverage to protect a new car that you purchase may be a better possibility.

You have to pay your premiums to keep your policy active and the active policy may have a provision that says that newly acquired vehicles will be covered before you call to add them.

By using your newly acquired vehicle provision on your policy, any car that you take possession of during the term will be covered for a limited amount of time.

If you call and add the car to your insurance during the automatic coverage time frame, you can backdate the addition. In most cases, you’ll have to call your carrier within 14 to 30 days.

Can you backdate the cancellation of your car insurance?

Backdating insurance cancellation dates of your insurance is another story. If you don’t need coverage on one or any of your cars, you do have the right to cancel your auto insurance policy on a date in the past if you have the right documentation.

Here are some scenarios where you can go back and cancel your insurance:

• You sell your vehicle
• You gift a car to someone and they buy their own insurance
• You get insurance through a new carrier

There’s no cut and dry answer. Sometimes you can backdate insurance and sometimes you can’t. If you need insurance now, you can get quick quotes by using an online tool.

Frequently Asked Questions

Here are some other common questions we receive about car insurance coverage and whether or not you can backdate your car insurance policy.

How quickly can you get insured on a car?

Most car insurance companies can set you up and have you insured the same day you call.

How long before you can make an insurance claim?

After an accident, most insurers require that you must make a claim within a reasonable timeframe. That varies, but some states have taken it upon themselves to pass laws that require you to report an accident typically within 30 to 60 days from the time of the accident.

What health insurance companies will backdate insurance?

Can you backdate health insurance? Whether or not a health insurance company will backdate your policy depends upon their own internal rules and your reason for backdating. As always, you’ll need to check with your own company.

The same really applies to backdating life insurance and backdating your home insurance policy.

Can I get Geico backdated insurance? What about State Farm or Progressive?

Every insurance company has its own rules for whether they’ll backdate your coverage and for how long. It’s best to contact them directly to find out if it’s available for you.

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