A car insurance lapse occurs when there’s a gap in your insurance coverage for any reason. Not only does a coverage lapse leave you unprotected in the event of an accident, but it can also lead to fines, license suspension and higher insurance rates.
How a car insurance lapse can impact you
Car insurance lapses can happen for a variety of reasons; perhaps you switched insurers and your new policy hasn’t started yet, or you missed a payment on your policy by mistake.
Regardless of the reason for your lapse, not having the proper coverage can lead to an array of consequences.
Increased auto insurance rates
Uninsured high-risk drivers who have had a lapse in car insurance are likely to see a rate increase on their next policy. However, the impact to your insurance will depend mainly on the period of time you’ve been without coverage.
- Lapses under 30 days: Approximately 8-9% raise in rates.
- Lapses up to 60 days: Up to 48% raise in rates.
- Lapses over 60 days: Insurer likely won’t renew your policy.
Your insurance company has a large role in how much you’ll pay for car insurance after a lapse. Most auto insurance providers see drivers as higher risk after an insurance lapse, so they’ll charge higher rates to drivers who have gaps in their recent coverage history.
You won’t have coverage
If you get into a car accident without insurance, you could be responsible for thousands of dollars in vehicle repairs and medical bills. This is particularly true for an at-fault accident; without liability insurance, you’ll be financially responsible for property damage or injuries suffered by the other driver.
You’ll face state consequences
Driving without car insurance is illegal in every state in the U.S. except New Hampshire. If you drive without at least liability coverage on your motor vehicle, you could face a suspended driver’s license, hefty fees and/or jail time. Carrying at least the state minimum coverage will ensure that you’re compliant with state law.
How to prevent a car insurance lapse
With all these potential consequences in mind, let’s take a look at a couple of ways to prevent a car insurance lapse.
Give yourself reminders about important tasks: Don’t let yourself forget to pay your car insurance until it’s too late! Nonpayment is regarded as a lapse in coverage by most insurers. Set reminders for yourself so you know when your payments are due or sign up for automatic payments.
Be mindful when scheduling your policy’s start and end dates: When switching between policies, it’s easy to have an accidental lapse in coverage by scheduling one to end too early or the other to start too late. Be sure that your old policy is scheduled to end on the same day that your new policy starts to avoid any gaps in coverage.
Purchase a car insurance policy in your budget: For many drivers, a car insurance lapse occurs because they are unable to pay their car insurance premiums. Before deciding on a policy, use a comparison app like Jerry to get quotes from multiple providers to ensure you’re getting the best rates.
Is there a car insurance lapse grace period?
Your car insurance company is required by state law to give you a grace period before they cancel your policy. You’ll receive notice either through your email or mail and typically have a grace period 10 to 20 days.
Reinstating a lapsed policy
In some cases, you may be able to contact your insurance provider and reinstate your car insurance policy after a lapse in coverage. Your eligibility for reinstatement will depend on how long the insurance lapse lasted.
Insurers may also take your payment history into account. If you’ve been with your current provider for many years without a missed payment, for example, they’re more likely to be forgiving of an insurance lapse.
The best ways to lower your rates after a car insurance lapse
1. Shop around with a trusted insurance agent or broker
Shopping for car insurance can help you find lower rates after a lapse. For a quick, easy shopping experience, use an insurance broker like Jerry to compare car insurance rates and find the best insurer for your situation.
2. Ask your provider about car insurance discounts
Many car insurance providers offer car insurance discounts to drivers for things like a good driving record, a telematics device or even good grades. Ask your provider about car insurance discount options available to you.
3. Raise your car insurance deductible
A higher car insurance deductible can result in lower car insurance rates. Just remember that you’ll still be responsible for paying your deductible out of pocket after an accident, so you should never raise it higher than you can afford.
4. Bundle your home and auto insurance
Bundling car insurance with other policies, such as homeowners insurance or renters insurance, can result in savings from 15% to 25% based on your chosen provider. Ask your insurance provider about bundling to see if it’s worth it for you.rth it for you.
FAQ
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Will you get in legal trouble for a car insurance lapse?
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Do you need an SR-22 if you have a car insurance lapse?
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How can you avoid a lapsed car insurance policy?
Kayda Norman is an insurance writer and editor with more than 12 years of content experience. She previously worked at NerdWallet as an insurance writer and content management specialist. She has covered a wide range of insurance topics such as high-risk drivers, auto insurance rate factors, and credit-based insurance scores. Her work has been featured in The New York Times, The Washington Post, and USA Today.
Liz Jenson is an insurance writer who specializes in general automotive and insurance topics. Liz’s mission is to produce informative and useful content to help car owners make smart choices when buying cars and car insurance. Since joining Jerry in 2021, Liz has written nearly 4,000 long- and short-form articles on topics including state-specific insurance recommendations, common car insurance questions, and deep dives into vehicle model details. Before they came to Jerry, Liz was a full-time student at Indiana University, Bloomington working on a double major in English and French.
