Const & Coverage
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Nothing good can come of skipping your car insurance premiums
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.
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.
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.
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.
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.
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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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.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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