If you don’t pay your car insurance premiums your policy will lapse. A lapse in coverage means you aren’t protected from car accidents or other damages
All but two states require car insurance, so driving uninsured could mean fines or license suspension
Most insurers offer a 10 to 20 day grace period for you to reinstate your policy without a lapse in coverage. You have to pay the balance you owe plus a reinstatement fee
If you can’t afford your auto insurance, you should consider shopping around for a new insurer and asking about discounts that you qualify for
When you purchase an auto insurance policy, you will be given a premium that you need to pay either monthly, bi-annually, or annually. If you don’t pay your premiums, your insurance company will cancel your auto policy. All but two states require drivers to have a minimum amount of car insurance in order to legally drive on public roads, so by driving without insurance you could be breaking the law.
Without coverage, if you were to cause an accident you’d be on the hook financially, so having the right amount of coverage for your needs is important. Your car insurance policy only stays active, or “in force,” if you pay your car insurance premiums.
But 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. But don’t panic, it typically isn’t difficult to get your policy reinstated.
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Your car insurance premiums are the payments you make to your insurance company to keep your policy in force. The actual cost of your insurance premium is determined by a number of different factors, things like:
Depending on your insurance provider, you likely have multiple options when it comes to how you want to pay your car insurance premiums, including:
Your provider may offer discounts for paying for your entire policy period upfront as opposed to in monthly payments, or for going paperless and completing all your payments online.
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.
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 before your policy is permanently canceled for nonpayment.
If you miss a payment, your car 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 insurance company is legally required to notify you, either by email or snail mail, before your policy is canceled.
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. Most times you will need to pay your insurance company a reinstatement fee as well.
That said, your insurance company might decide not to reinstate your policy or if they do you could end up paying higher rates than before.
If you can't afford car insurance, you might be paying too much with your current insurer. 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 ways to lower your car insurance premiums.
Unless you live in one of the two states that does not require car insurance by law, you should never drive uninsured. 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 putting your car in long-term storage and 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 a garage or in your driveway, your rates will be lower and you won’t have to worry about any gaps in your coverage. Just remember to reinstate your liability coverage before you begin driving it again.
About the authors
Anna Swartz is a Managing Editor at Policygenius in New York City, and an expert in auto insurance. Previously, she was a senior staff writer at Mic, writing about news and culture. Her work has appeared in The Dodo, AOL, HuffPost, Salon and Heeb.
Kara McGinley is an Insurance Editor at Policygenius. She previously worked as a freelance writer and a copywriter for various startups. Her work can be found in Teen Vogue, The Culture Crush, Mask Magazine, and more.
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.
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