How Does a Car Insurance Lapse Impact Rates?

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  • What is it?
  • Rate increases
  • Penalties by state
  • Why policy lapses happen
  • Affordable coverage
  • Steps to take
  • Reinstate your policy
  • Buy a new policy
  • How to avoid a lapse
  • FAQs
Drivers that allow their car insurance to lapse for 30 days see an average premium increase of 8%. And those that had insurance lapses that lasted longer than a month saw an average increase of 35%.
Letting your insurance lapse indicates in an insurance company that you might exhibit other risky behavior, like driving recklessly.
That’s why car insurance comparison shopping and broker app Jerry has compiled everything you need to know about how insurance lapses can impact rates.
If you’re thinking of dropping your car insurance because it’s too expensive, Jerry can help you find cheap car insurance that meets your coverage needs.
After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick. The average Jerry driver saves $879 on car insurance.
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What is a car insurance lapse?

A car insurance lapse is when a car is registered in your name but isn’t insured for a period of time.
Even if you have a lapse in coverage for a single day, it could result in a premium increase.
Driving without car insurance coverage may result in fines and violations on your driving record.
By driving uninsured, you’re telling insurers you’re a risky investment, and that can lead to increased rates when you reinstate your policy or buy a new one.

How much will car insurance rates increase after a coverage lapse?

If you resolve your car insurance lapsed within 30 days, you could face an 8% rate increase. If your policy lapses longer than 30 days, your premium could skyrocket 35% to 69%.
This translates to hundreds (if not thousands) of dollars a year.
Along with premium increases, you might also face additional penalties from your home state. Fortunately, car insurance lapses are usually overlooked within three to five years if you maintain consistent payment.

Car insurance lapse penalties by state

If you have a registered vehicle, you need car insurance in almost every state in the U.S. While some states regulate that better than others, some go as far as having companies report to state DMVs when the insurance on a registered car has lapsed.
When the DMV is notified of your lapse, you leave yourself open to license and/or registration suspension, suspension, civil fines, and SR-22 filings among other penalties.
Here are the penalties for car insurance lapses by state:
StatePenalties
Alabama$200 license reinstatement penalty for the first lapse, $400 the second lapse
Alaska$100 license reinstatement penalty
Arizona$50 license reinstatement penalty
Arkansas$100 license reinstatement penalty
California$14 registration reinstatement penalty
Colorado$40 license reinstatement penalty
Connecticut$200 license reinstatement penalty
Delaware$100 lapse penalty per vehicle + $5 per day after 30 days
District of Columbia$150 lapse penalty + $7 per day after 30 days
Florida$150 registration and license reinstatement penalty for first lapse, $250 for second, $500 for third
Georgia$25 penalty for lapse longer than 10 days + $60 days after 30 days
Hawaii$20 license reinstatement penalty
Idaho$85 license reinstatement penalty
Illinois$100 reinstatement penalty
Indiana$150 reinstatement penalty first lapse, $225 second lapse, $300 for third lapse
IowaNA
Kansas$100 reinstatement penalty first lapse, $300 for second lapse within one year
Kentucky$40 registration reinstatement penalty
Louisiana$125 lapse penalty for 30 days, $225 for 31 to 90 days, $525 over 90 days, up to $850 max
Maine$50 license reinstatement penalty, $20 to $30 additional penalty, $35 registration penalty
Maryland$150 penalty first 30 days, $7 per day after 30 days, registration penalty up to $25
Massachusetts$500 reinstatement penalty
Michigan$50 registration penalty
Minnesota$30 license and registration reinstatement penalty
Mississippi$30 license reinstatement penalty
Missouri$20 license reinstatement fee
MontanaNo charge for first lapse
Nebraska$500 reinstatement penalty
Nevada$250 penalty for lapse under 30 days, $250 for lapse between 31 to 90 days, $500 for lapse between 91 to 180 days, $1,000 for lapse more than 181 days
New HampshireNA
New Jersey$100 restoration penalty
New Mexico$30 registration reinstatement penalty
New York$8 per day civil penalty for lapses under 30 days, $10 per day for next 30 days, $12 per day for 30 days after
North Carolina$50 civil penalty first lapse, $100 for second lapse, $150 for third lapse
North DakotaNA
Ohio$60 penalty + $100 reinstatement penalty for first lapse, $300 for second lapse, $600 for third lapse
Oklahoma$125 administrative penalty + $275 reinstatement penalty
Oregon$75 license and registration reinstatement penalty
Pennsylvania$88 restoration penalty
Rhode Island$50 reinstatement penalty
South Carolina$5 per day lapse penalty, up to $200
South Dakota$50 to $200 license reinstatement penalty, depending on time lapses
Tennessee$50 administrative penalty + $65 license and registration restoration penalty
Texas$100 reinstatement penalty
Utah$100 reinstatement penalty
Vermont$71 license reinstatement penalty
Virginia$145 registration reinstatement penalty
Washington$75 reinstatement penalty
West Virginia$100 registration reinstatement penalty
Wisconsin$60 license reinstatement penalty
Wyoming$50 reinstatement penalty

Common reasons for policy lapses

There are many reasons you may lapse on your insurance:
  • You forget to renew your policy
  • You don’t have the money to pay for your insurance
  • You’re not using your car
  • You switch insurance companies, and your new policy doesn’t start on the same date that your previous policy ended.
  • Your car was in an accident or needs repairs.
  • You are deployed overseas or studying/moving abroad and cancel your car insurance.
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Don’t risk getting slapped with fines! Use Jerry to find affordable coverage

Rather than letting your coverage lapse, find the coverage you need at a price you can afford.
It’s this simple: download Jerry, and in less than 45 seconds, Jerry collects all of your information from your existing insurer.
Choose from competitive quotes from up to 45 top insurance companies, and Jerry takes care of the rest—securing your new policy and canceling your old one. No long forms. No calling around. No hard work. Just savings. The average Jerry user saves $879 a year on car insurance.
“Once you purchase through Jerry, they continue to shop for you months before your policy is up for renewal!! I will never shop for car insurance again. I will use Jerry’s app to get quotes in the future!” — Satisfied Jerry Customer

What to do if you have a coverage lapse

If you have a coverage lapse, there are several things you can do to get back on track. But it is important to act fast. The longer the lapse, the harsher the potential penalties.

Reinstate your policy

The first thing you should do is call your insurance company to request reinstatement.
This is when your policy is reactivated after a lapse for non-payment. Depending on what state you’re in and how long the lapse was, you may have to pay a fine and face other penalties from your insurance provider.

Buy a new policy

If you can’t reinstate your old policy, buy a new policy.
If you’re hesitant to switch insurance providers because you’re worried about the work involved, don’t be—Jerry does all the paperwork for you.
You’ll never have to print anything, go to the post office, or even get on the phone. Jerry handles it all. Really!
If you’ve never lapsed before and haven’t had multiple claims near the time of your lapse, you will likely be reinstated without difficulty.
“Jerry is the best app ever. I entered basic information about myself (it took less than 2 minutes), and Jerry did the rest. They were able to find insurance with the exact coverage I had before Jerry at a much cheaper rate. My monthly payment went from $110/ month to $58/month. I did nothing. The app is completely free.” — Satisfied Jerry User.

How to avoid a car insurance lapse

The best way to avoid the headache (and expenses) of car insurance lapses is to prevent them altogether!
Here are a couple of ways to stay on top of it:
Save important dates: Set phone reminders to keep track of when your policy is up for renewal or when payments are due.
Make sure your policies overlap: If you’re switching car insurance policies, make sure the new policy’s start date overlaps with the end date of your old one.
Buy a policy you can afford: If you can’t afford your current premium, work with your car insurance company to reduce your rates. Perhaps they have worthwhile insurance discounts or you could also shop around to find cheaper car insurance.
Maintain suitable coverage: If you’re not using your car, you can always reduce your coverage to just comprehensive coverage.
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Frequently asked questions

Are there car insurance lapse grace periods?

Many insurance companies give you a 20 to 30 day grace period to pay your premium before they cancel your policy. They also have to provide you with a warning before they entirely cancel your policy— it’s the law.

How can I find cheap car insurance quotes?

If you want to save money on car insurance, the Jerry app is a good place to start.
As a licensed broker, Jerry does all the hard work of finding the cheapest quotes from the top name-brand insurance, so choosing a new policy is easy. Jerry will even cancel your old policy for you.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price.
This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the country’s top insurance app.
“When I first saw this app, it seemed too good to be true. To my shock, they found another reputable company that would save me $116-ish and was the same coverage I had on my previous policy. Not only that, but the app would do all the work of switching me over and helping me cancel my other policy! — Satisfied Jerry Customer
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