I wasn't able to pay my car insurance bill and my policy was cancelled. Will I be rejected when I want to buy new auto insurance?

You may find it harder to find affordable car insurance because of your lapse in coverage. You need to shop around for the best car insurance quotes. Whatever you do, don't let the dread of paying higher premiums keep you from getting insured if you plan to keep your car and continue driving.

If you're caught driving without insurance, you could face a fine or a suspended license. In some states, you can be ordered to attend an administrative hearing. You could even lose your ability to renew or register a vehicle if you continue to drive and fail to get your insurance reinstated. In some states, insurers are required to notify their state department of motor vehicles about lapses in customers' car insurance policies. You also leave yourself wide open for lawsuits and financial ruin if you drive without insurance and cause a serious accident.

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Most car insurance companies charge a higher premium for consumers who have allowed their car insurance policies to lapse. That's because as a group those folks tend to have higher claims once coverage is reinstated. Insurers charge higher rates in anticipation of the potentially higher costs. Insurers also consider a series of small lapses in coverage an indicator that a consumer might have trouble paying car insurance bills.

To find the best deal, get at least three car insurance quotes and be prepared to explain truthfully what happened when asked about the lapse in coverage. Withholding information could lead to more hassles and having your claim denied.

For more, see auto insurance evaders face high premiums.