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
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.
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.
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.
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
. 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
. 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
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.