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.
What are car insurance premiums?
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:
Your driving history
Your ZIP code
The make and model of your car
The age of your vehicle
➞ Learn more about how car insurance premiums are calculated
How do I pay my car insurance premiums?
Depending on your insurance provider, you likely have multiple options when it comes to how you want to pay your car insurance premiums, including:
Automatic charges to your credit or debit card
Bank account withdrawals
Paying in person at your carrier’s local office
Paying via a mailed check
Paying online or through a mobile app
Your provider may offer discounts for paying for your entire policy period upfront as opposed to monthly payments, or for going paperless and completing all your payments online.
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.
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.
Is there a grace period for paying car insurance?
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 25 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.
How to reinstate your policy after it lapsed
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.
➞ Learn more about how to reinstate a canceled auto insurance policy
What if I can’t afford auto insurance?
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:
Bundle your auto insurance with your home or condo insurance
Ask your insurance company about discounts that you might qualify for. Many offer discounts for safe driving, different affiliations, and safety precautions like installing an anti theft system to your vehicle
Increase your deductible. 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 pay a higher deductible, which isn’t always ideal
How long can I go without insurance?
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.
Frequently Asked Questions
Can I just stop paying my car insurance?
If you don’t pay your car insurance, your policy will lapse, which means you’ll no longer be insured. Driving without insurance is illegal in most states, and getting into an accident without insurance can cause you to lose your license or registration, and could leave you on the hook for tens of thousands of dollars in damage. If you let your policy lapse, your rates will also be higher when you go to apply for coverage again.
Does not paying insurance affect credit?
Insurance companies use your credit score, along with a number of other factors, to determine whether or not to insure you and to calculate your car insurance rates. However, they do not report your missed payments to a credit bureau, so not paying your insurance premium will not affect your credit score.
How long can you go without car insurance before being penalized?
Many car insurance companies offer a grace period between 10 and 25 days after your missed payment before canceling your policy. Your insurance company is legally required to notify you before canceling your policy for nonpayment, but depending on your insurer, you may be able to reinstate, or restore, your canceled policy.
