How a Car Insurance Lapse Can Impact Your Rates

An insurance lapse will result in high insurance costs when you buy a new policy and leave you without protection in case of an accident.
Written by Jessica Barrett
Edited by Kathleen Flear
Reviewed by Brice Regling
An insurance lapse will result in higher
car insurance
rates when you’re ready to purchase a policy and leave you vulnerable if you get into an accident while uninsured.

How a car insurance lapse impacts you

Whether it’s the result of non-payment or because you don’t currently have a car, a lapse in your car insurance coverage signals to your insurance company that you are a higher-risk driver and results in three key consequences:
  • No insurance coverage while on the road
  • Penalties from your state
  • Higher rates when you reinstate or purchase a new insurance policy
No coverage
Driving without car insurance
is illegal in nearly every state and leaves you financially vulnerable. If you’re involved in an at-fault accident, you could be responsible for tens of thousands of dollars of damage.
State penalties
Some states require that insurance companies notify the DMV when an insurance policy lapses, and penalties can include license and/or registration suspension, fines, and SR-22 filings. 
Select your state to see the consequences you’ll face for allowing your insurance policy to lapse.
Rate increases
Generally speaking, the longer the lapse, the more you’ll have to pay for your future insurance policy.
  • Insurance lapses of less than 30 days tend to result in rate increases of about 8–9%
  • If you go without insurance coverage for more than 30 days, you’ll be looking at a significant rate spike of anywhere from 35% to more than 50%

Expert Insurance Agent Insight

Director of Sales and Service
Many people don't realize how much lapses affect rates. Instead of canceling your policy altogether, keep a non-owners policy active. Oftentimes, your current carrier may allow the policy to be converted to a non-owners policy. Sometimes you may have to get a new carrier altogether. But either way, keeping the policy active maintains your continuous insurance discounts.

What to do after an insurance lapse

If you’re only a few days into an insurance lapse, you might be able to call the insurance company and have them reinstate your policy.
In cases of longer lapses, your best bet is to shop around for a new policy.
Rate increases differ by provider and comparing at least 3–5 insurance quotes will help you find the most affordable policy.
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How to prevent an insurance lapse

Insurance lapses are typically avoidable. Here are some easy things you can do to prevent them:
  • Schedule reminders for important tasks: Jerry lets you set up payment reminders and offers an automatic re-shop feature before your policy renewal date.
  • Schedule your coverage start and end dates: Schedule your new policy start date to coincide with the end date of your old policy.
  • Buy a policy you can afford: Shop around for the best premium and take advantage of discounts to make sure you can afford your monthly payments.


Are there car insurance lapse grace periods?

There is no grace period for an insurance lapse. But if you haven’t paid your premium, most insurers will give you a grace period before they cancel your policy. The grace period varies and can be as little as one day or as long as 30 days.
Your insurance company must provide you with a warning before canceling your policy—it’s the law.

How long can car insurance lapse before you're penalized?

Even one day without car insurance counts as a lapse and can leave you vulnerable to a rate hike. That said, not all insurance companies will raise your rates if you resolve the lapse promptly. Check with your insurer to learn about their policy.

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