What Happens if You Let Your Car Insurance Payments Lapse?

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Allowing your car insurance coverage to lapse can get you in trouble with the law, including tickets, fines, and license suspension. Not to mention—even the smallest lapse can cause a huge spike in your car insurance premium when you reinstate your coverage.
All states in the U.S. require you to carry a minimum amount of liability insurance. But if you don’t pay your premium, your coverage can lapse.
What exactly happens when your car insurance lapses due to non-payment and what options do you have? The car insurance comparison shopping and broker app Jerry has compiled everything you need to know.
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Required coverage for driving in the U.S.

All states within the U.S. require you to have some way of paying for bodily injury or property damage if you cause a car accident, usually in the form of liability insurance. Here are the liability coverage requirements in each state.
StateBody injury liability per personBodily injury liability per accidentProperty damage coverage requirements
Alabama$25,000$50,000$25,000
Alaska$50,000$100,000$25,000
Arizona$15,000$30,000$10,000
Arkansas$25,000$50,000$25,000
California$15,000$30,000$5,000
Colorado$25,000$50,000$15,000
Connecticut$20,000$40,000$10,000
Delaware$15,000$30,000$10,000
District of Columbia$25,000$50,000$10,000
Florida$10,000$20,000$10,000
Georgia$25,000$50,000$25,000
Hawaii$20,000$40,000$10,000
Idaho$25,000$50,000$15,000
Illinois$20,000$40,000$15,000
Indiana$25,000$50,000$10,000
Iowa$20,000$40,000$15,000
Kansas$25,000$50,000$10,000
Kentucky$25,000$50,000$10,000
Louisiana$15,000$30,000$25,000
Maine$15,000$30,000$10,000
Maryland$30,000$60,000$15,000
Massachusetts$30,000$60,000$15,000
Michigan$20,000$40,000$10,000
Minnesota$20,000$40,000$10,000
Mississippi$25,000$50,000$25,000
Missouri$25,000$50,000$10,000
Montana$25,000$50,000$10,000
Nebraska$25,000$50,000$25,000
Nevada$15,000$30,000$10,000
New Hampshire$25,000$50,000$25,000
New Jersey$15,000$30,000$5,000
New Mexico$25,000$50,000$10,000
New York$25,000$50,000$10,000
North Carolina$30,000$60,000$25,000
North Dakota$25,000$50,000$25,000
Ohio$12,500$25,000$7,500
Oklahoma$25,000$50,000$25,000
Oregon$25,000$50,000$20,000
Pennsylvania$15,000$30,000$5,000
Rhode Island$25,000$50,000$25,000
South Carolina$25,000$50,000$25,000
South Dakota$25,000$50,000$25,000
Tennessee$25,000$50,000$15,000
Texas$30,000$60,000$25,000
Utah$25,000$65,000$15,000
Vermont$25,000$50,000$10,000
Virginia$25,000$50,000$20,000
Washington$25,000$50,000$10,000
West Virginia$25,000$50,000$25,000
Wisconsin$25,000$50,000$10,000
Wyoming$25,000$50,000$20,000

What happens if your car insurance lapses?

Drivers who do not keep up with car insurance payments can expect a ticket or fine. In many states, though, the penalties are even steeper—especially if you have more than one offense.
If you let your car insurance lapse and continue driving, here are some of the things that can happen:
  • Tickets and fines: Many state law enforcement officials write tickets for driving without proof of insurance. Depending on the state, fines range from a few hundred to several thousand dollars.
  • Higher insurance rates: Having continuous coverage is a rating factor that provides additional discounts. After a lapse, insurance providers can and will charge a higher premium moving forward.
  • Suspended driver’s license: Some states suspend your driver’s license if you’re caught on the road without insurance.
  • Suspended car registration: States can also suspend your car registration for the uninsured car.
  • Impounded car: There are a few states that impound uninsured cars. To get your car back, you’ll need to pay a hefty fee plus any applicable fines.
  • Jail time: While it isn’t usually given for your first offense, subsequent offenses can net you time in jail in some states.
  • Car repossession: If your car is financed, you likely signed a contract stating that you would maintain a certain level of insurance coverage. Driving without insurance can lead to the repossession of the car.
Key Takeaway Always make sure the car you drive has the minimum amount of coverage required in your state. Failure to do so can lead to monetary fines, a suspended license, and even jail time.

What to do if your car insurance lapses

If your car insurance does lapse, you need to find new coverage or reinstate the old insurance policy. Call your insurance company immediately upon learning of a lapse. You’ll usually need to pay a late fee and a higher premium once your coverage resumes.
Whether your insurance company reinstates your old insurance depends in part on your driving record payment history, and prior cancelations. If the insurance company refuses to renew your coverage or offer you a new policy, then you need to find car insurance from another insurance company.
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