How to Reinstate a Policy After a Lapse

How to Reinstate a Policy After a Lapse
A reinstatement after a lapse occurs when the carrier restores coverage after a period of no coverage between the cancellation date and the reinstatement date. This requires careful handling in Momentum AMS to accurately reflect billing, maintain compliance, and communicate the gap to the insured.

1️⃣ Locate the Policy

Use Dynamic Search to find the insured.
Open the Insured’s Profile and go to the Policies section.
Click the Policy Number for the canceled policy you are reinstating.

2️⃣ Reinstate the Policy in AMS

In the policy details screen, click Actions (upper-right).
Select Reinstate Policy from the dropdown.
Enter:
- Reinstatement Effective Date (this will be after the cancellation date, creating a gap in coverage).
- Reason for Reinstatement (e.g., payment received late, underwriting approval).
Click Save Changes to mark the policy as active in Momentum AMS.

3️⃣ Process the Premium Endorsement

Since there’s a lapse, the premium will often be pro-rated to account for the gap:

Go to the Billing tab in the policy.
Click on Endorsements / Fees & Taxes.
In the reinstatement transaction, click Actions → Edit Endorsement Fee.
Adjust the Base Premium to reflect the reinstated term.
Adjust taxes and fees accordingly.
Click Generate Transaction and verify the Checksum is zero before saving.

? Note: If the carrier has already calculated the adjusted premium, enter their exact numbers to match accounting.

4️⃣ Document the Lapse in Notes

Go to Activity History → Notes for the insured.
Create a note including:
- Lapse dates (cancellation date and reinstatement date).
- Carrier confirmation and any reference numbers.
- Reason for the lapse and any underwriting conditions for reinstatement.
Attach supporting documents (carrier notice, emails) to the note or in Documents → Files.

5️⃣ Communicate With the Insured

Clearly inform the insured in writing that there was a gap in coverage and specify the dates.
Provide an updated invoice (for Agency Bill) or carrier payment instructions (for Direct Bill).
Advise them to review certificates of insurance — any COIs issued during the lapse period should be updated or withdrawn.

✅ Best Practice: Never backdate coverage in AMS to remove the lapse unless directed in writing by the carrier. Always keep accurate dates for compliance and E&O protection.