What Happens if You Don’t Pay Your Car Insurance?

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If you don’t pay your insurance premiums, you won’t be covered when driving and you’ll be vulnerable to financial liability if you're in an accident. Ultimately, you could lose your coverage, your premiums might increase, or a collection agency may try to hunt you down for payment. You could even lose your car.
To ensure you’re covered when driving, it’s important to always pay your car insurance premiums on time. If you’re having trouble getting the money together for your premium, you can always look for comparable coverage at a better rate.
That’s where Jerry comes in. Jerry is a car insurance broker and comparison shopping app. Signing up takes just 45 seconds out of your life, and then Jerry shows you competitive quotes from more than 40of the country’s top insurers.
If you’re worried about having enough cash in the bank for your next payment, Jerry can help you find the right coverage at a better price than your current coverage. Not only will you save money, but you’ll be protected when you’re on the road.
Read on to find out what could happen if you don’t pay your car insurance premium.
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What happens if you don’t pay your car insurance premium?

Not paying your car insurance premiums can have serious repercussions, including a hike in premiums and possibly losing your car.. Here’s what will happen if you stop paying for your car insurance.

You'll receive a reminder

If you miss a premium payment, your insurer will send you a sternly worded letter reminding you to pay up. You’ll most likely receive this letter in the form of an email or a text message. You might be charged a late fee if you make your payment past the due date.
If you find yourself in this situation, do your best to pay up. The consequences only get worse from here on out.

You won’t be covered if you’re in an accident

If you stop paying your premiums, your coverage has lapsed—which means you’re not protected when driving.
If you’re in an at-fault accident and you have no insurance, you could be liable for damage to the other driver’s car or any injuries sustained. Such an event could be financially devastating.
Even if you’re just pulled over by police while uninsured, the consequences can be grave. Most states mandate a minimum level of insurance, and you could face serious fines or penalties by driving while uninsured.

Your coverage may be canceled or your premiums may increase

Missing just one premium payment can lead to your insurance company canceling your policy. If this happens, you’re likely to face higher premiums for a new policy, since insurers will be able to see your payment history and flag your missed payment. A missed premium payment can paint you as a risk to future insurers, no matter the reasoning.
If you miss a payment and your policy isn’t canceled, your premium may rise once you’ve settled up with your insurer.
Key Takeaway Do everything in your power to never miss an insurance payment, as your insurer may cancel your policy as a result.

Collection agency involvement

Some insurers will send a collection agency to pester you about your missing payment. While you’re not likely to encounter Dog The Bounty Hunter, having a collection debt can impact your credit score. This can hurt you in many ways, such as when you’re:
  • Buying or renting a home
  • Applying for a loan
  • Applying for a credit card
  • Making investments
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You could lose your car

If you are financing your car through a lender, you’ll be required to maintain a certain amount of insurance in order to protect their investment. If you default on an insurance payment and are stripped of your coverage, your lender may be legally entitled to seize your car from you.
It's more likely that your lender will require you to get forced-placed insurance, a less-than-ideal insurance policy. Either way, you'll want to keep paying your car insurance to ensure you don't lose your car or end up with a bad insurance policy.

Is there any grace period before losing car insurance coverage?

Depending on your insurance company, you may have a grace period before you’re stripped of your coverage. When offered, it’s usually between 10 and 20 days.
If your insurer decides to revoke your policy, you’ll be notified of the cancellation. That said, your insurer may reinstate your coverage once you pay the premiums that you owe.

What to do with a lapsed policy

If your policy lapsed, it’s important not to drive again until you are insured. If you manage to pay any outstanding balance to your insurer after only a few days, you can usually negotiate so that your coverage is reinstated.
Longer lapses in coverage are more problematic. The longer you go without insurance, the more difficult it is to buy insurance in the future. Insurers may see you as a risk and refuse to insure you. If a provider does decide to insure you, you’re likely to pay significantly higher premiums due to your extended lapse in coverage.
If you manage to get insured, it’s vital to pay your premiums on time and maintain a clean driving record. If you go 6 to 12 months without a claim, you may be in a position to ask your insurer about lowering your premiums.

Affordable car insurance premiums make it easier to pay

If you’re annoyed at how expensive your car insurance premiums are, take heart. With Jerry, finding affordable car insurance is a piece of cake!
Sign up takes a mere 45 seconds, and then you’ll be able to sort through competitive quotes from 45 top car insurers. The average Jerry customer saves an average of $879 per year! Here’s what one had to say...
"Most useful app I’ve ever downloaded! I’ve been dealing with agencies and quote websites for the longest time and this app made it so much easier than it’s ever been. In a matter of MINUTES I was able to get multiple quotes, cancel my policy, start my new one, save $230 a month, AND it automatically does quotes for you every 5 months to make sure you’re paying the lowest possible price" — Jerry user
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Frequently asked questions

Is there any reason to not pay car insurance premiums?

Nope. It’s incredibly important to pay your premiums on time, as you risk losing your coverage if you don’t. If you can’t afford to pay your rates, you can always shop around for a better policy that is more affordable.

Does not paying insurance affect credit?

It absolutely can. And a dent in your credit score can have a serious impact if you’re trying to buy or rent a home, buy or lease a car, apply for a loan or credit card, or make investments.
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