What happens if I don't pay my car insurance?

Nothing good can come of skipping your car insurance premiums

Anna Swartz 1600

Anna Swartz

Published February 4, 2019

No matter where you live in the U.S., your state probably requires you to have at least some car insurance coverage.

Without coverage, if you were to cause an accident you’d be on the hook financially, so having car insurance is still a good idea. But your car insurance policy only stays active, or “in force,” if you pay your car insurance premiums.

What happens if you miss a payment, or if you can’t afford to pay? If you don’t pay your car insurance, your policy will lapse, and that can mean serious consequences. Here’s what you need to know.

What are car insurance premiums?

Your car insurance premiums are the payments you make to your insurance carrier to keep your policy in force. The actual cost of your insurance is determined by a number of different factors, including your driving history, your age, your ZIP code, the type of car you have and how often you drive it. A Policygenius expert can help you find out how much auto insurance would cost you and compare quotes from different carriers.

Depending on your insurance provider, you likely have multiple options when it comes to how you want to pay your premiums. You usually have a choice when it comes to payment methods, including automatic charges to your credit or debit card, bank account withdrawals, paying in person at your carrier’s local office, or paying via a mailed check. And nowadays, many carriers also make it easy for you to pay online or through a mobile app.

Your provider may offer a discount for paying for your entire policy period upfront as opposed to in monthly payments.

What happens if I miss a payment?

If you don’t pay your insurance premiums, your policy will lapse, and you won’t have coverage. That means that, depending on where you live, it might be illegal to continue driving your car. Doing so anyways could mean pricey fines and even license suspension, depending on your state.

And having a lapse in auto insurance coverage can also affect your ability to get covered in the future. When you apply for car insurance again, a new provider will consider any gaps in coverage, and having lapses in your past will probably mean you’ll pay higher premiums.

But don’t panic right away if you’ve just missed a payment — you still have some options.

Is there a grace period for paying car insurance?

If you miss a payment, your insurance probably won’t be canceled right away. Depending on your home state and your specific insurance provider, you likely have a grace period of between 10 and 20 days before your insurer cancels your policy. And even then, your provider will notify you, either by email or snail mail, before your policy is canceled.

Reinstatement after a lapse

If your policy has already been canceled, you can still ask your carrier if your policy can be reinstated, which means that, after you pay your past-due balance, you’ll get your original policy back without a lapse.

What if I can’t afford auto insurance?

If you can't afford car insurance, you might be paying too much with your current carrier. It’s never a bad idea to shop around and compare quotes from other carriers to see if you could be getting a better deal somewhere else.

There are other things you may be able to do to lower your premiums, like bundling your auto insurance with your home or condo insurance or making sure you’re getting any discounts you may quality for.

You might also consider increasing your deductible. The deductible is a set amount of money you’d cover for repairs before your insurance kicks in. Typically, the lower your deductible, the higher your premiums, so raising your deductible can lower your monthly rate. But that means that, if you have an accident, you’ll have to pony up for that higher deductible.

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How long can I go without insurance?

While short lapses in coverage do occasionally happen, it’s best to stay continuously insured if possible. Usually, when you switch policies, your old one ends on the same day your new one begins, so you can prevent having any gap in your coverage — even a short lapse can increase costs down the line.

Instead of going without auto insurance, if you don’t need to drive your car, consider reducing your current coverage to just comprehensive coverage. Comprehensive coverage, or comp insurance, covers any damage to your vehicle that happens while it’s not being driven — like damage from extreme weather, vandalism or theft. That way your vehicle will stay protected while it sits in your driveway, your rates will be lower and you won’t have to worry about any gaps in your coverage.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.