How Long Does an Insurance Lapse Stay on Your Record?

Insurance lapses stay on your insurance record for at least six months or longer, raising rates by an average of 25%.
Written by Liliana Pina
Edited by Pat Roache
A lapse in insurance will typically cause your
car insurance
rates to increase by about 25% for at least six months after reinstating an insurance policy or taking out a new one, depending on your plan, provider, and the circumstances of the lapse.
  • The effect of an insurance lapse on your auto insurance policy will depend on how long it lapsed and whether or not it was the result of a cancellation or non-renewal.
  • Car owners have a legal responsibility to make sure their vehicle is covered by an active liability policy, and even one day without coverage could negatively affect rates.
  • Paying bills on time and keeping track of your policy’s expiration date are key steps to avoid a potential lapse in coverage.
  • Most car insurance companies have a grace period for missed payments.

An insurance lapse affects your record for at least six months

In most cases, car owners who have had a
lapse in insurance
for any period of time experience higher insurance premiums for at least six months after reinstating their insurance policy or taking out a new one.
The extent to which a policy lapse remains on your driving record and affects your rates depends on a few factors:
What to expect: Your auto insurance rates should return to your original premium over time if you keep a clean financial and driving record after your new insurance coverage kicks in.

Why an insurance lapse negatively affects your insurance

A lapse in car insurance coverage occurs any time your vehicle is left without an active
liability insurance
policy to protect other drivers in an accident. As long as you own a car, providers and the state will assume that you’re driving it and punish you for failing to maintain financial responsibility for other drivers.
Driving without insurance
leaves you open to a lot of financial risk:
  • You lack financial responsibility to cover other driver’s costs if you’re ever
    in an at-fault accident while uninsured
  • It is illegal to own and drive your car without
    proof of insurance
    in almost every state.
  • In some cases, your state DMV can suspend your driver’s license and vehicle registration if your auto insurance company informs them of a lapse of insurance. 
The bottom line: Whether the lapse lasts one day or one year, it will negatively impact your record and monthly payments for coverage. The sooner you restore your auto insurance coverage, the less negative repercussions you will face—especially if you're looking to reinstate a policy with your former provider.

How to avoid a future coverage lapse

The best way to avoid the negative financial repercussions that come with not having an active insurance plan is to take steps to ensure you maintain your coverage:
  • Pay your bill on time: Your insurance provider has the right to
    cancel your policy for nonpayment
    , thus lapsing your coverage. If you have trouble remembering to pay your monthly bill, consider utilizing your provider’s
    automatic payment function
    to ensure that the bill is taken care of even if it slips your mind. 
  • Practice safe driving:
    High-risk drivers
    have a harder time getting approved for coverage and receive much more expensive rates if they do. On the other hand, insurance companies often
    reward their safe drivers
    with discounted rates.
  • Keep track of deadlines: In addition to the due date for your monthly bill, you should know when your
    policy is up for renewal
    . This will allow you to shop for other insurance plans before the renewal deadline and have your next policy set up before your current plan’s expiration.
  • Monitor your correspondence: Promptly read all correspondence from your insurance provider—especially if you've recently
    filed a claim
    . You’ll stay up-to-date with any new expectations, requirements, or upcoming deadlines, and be able to resolve potential problems between you and your insurance before they can become greater issues.
  • Switch providers before the renewal deadline: If you're struggling to afford your current insurance policy, you should look into a
    new policy from a different provider
    that meets both your personal and financial needs. Make sure to schedule the new policy to start a day or two before your current policy expires to avoid a lapse in coverage.
"My policy of 2.5 years lapsed, and I needed to look for something cheaper.
found me a better policy with Progressive in 30 minutes––and I didn’t have to talk to anyone on the phone. Amazing!” —Jacques S.
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