Definition of Lapse in Coverage or Policy Lapse
Lapse in coverage is the point in time when an insurance policy is no longer valid because it was terminated because the covered claimant failed to pay the premium or the insurance company cancelled the contract for other valid reasons.
Lapse in coverage can occur for home owner's insurance and car insurance. Claimants who fail to pay their premiums may not have insurance to pay for the cost of their injuries if their injuries occur after the lapse in coverage.
Consider, however, if your injuries are due to the negligence of another person, for instance you are injured in a car accident due to the negligence of another person, it may not matter whether or not you have insurance, unless you are in a no-fault state, because the negligent driver's insurance company will be responsible for paying for your losses.