I know if you let it lapse by even a day, you're not covered for any previous time even if you had coverage but I agree with Scott.  Now you're paying an extra premium for being insured with the same company with no gaps? 

Funny the cell phone companies seem to work the same way - they won't honor their ads they use to attract new customers for their current, loyal customers so you're practically forced to change providers to take advantage of a good deal.  Sounds like you're being penalized for your loyalty and for doing what you were supposed to do all along!  Insane.