Insurance lapse: Your guide to understand, fix, and prevent it

What happens if my car insurance policy lapses?

If you miss a car insurance payment, your coverage will typically lapse after a 10–15-day grace period—depending on where you live and the type of payment missed—leaving you and your car unprotected. If you’re caught driving while your car insurance is lapsed, you could face legal penalties such as fines, having your car impounded, or even jail time.

Even if your car insurance lapses, there’s good news—you should be able to restart your coverage. Contact your insurance provider right away to find out how you can get back on the road.

What should I do if my car insurance lapses? If your car insurance lapses, the best course of action is to immediately contact your car insurance provider and resolve the issue by restarting it. In most cases, if you act quickly, the matter can be resolved instantly and with minimal penalties for you and your record.

Is there a car insurance lapse grace period? After you miss a payment, you’ll typically have about a 10–15-day grace period before your policy is canceled. However, if you miss a payment to renew your policy, your policy could automatically expire at the end of the term. Most states have laws that protect you from having your insurance policy canceled without advance notice from your insurance provider. This helps ensure you continue to meet the minimum insurance requirements with at least liability coverage. In most cases, your insurance company will send you a cancellation notice when you miss a payment and let you know if you have time to make a payment to avoid a lapse. If you’re not signed up for paperless billing or bill alerts, this notice will probably come in the mail, meaning you’ll have less time to make your payment once you receive it. If you miss a renewal payment, your insurance company might not send a cancellation notice at all. The details of your insurer’s missed payment notification policy are in your contract. Review those details—or get in touch with your insurance provider—to help avoid a car insurance lapse.

Can I pay my car insurance 1 day late? You typically have 10-15 days after a missed payment before your auto insurance is canceled, so if you make a payment one day late you may be able to avoid a lapse. If you miss a renewal payment, however, your policy could automatically expire at the end of the term. Keep in mind, whether or not your insurance does lapse, missing a payment—even by a day—will likely incur late fees, and you’ll still need to pay for the time that you’re insured after the missed payment.

Do late car insurance payments affect credit? If you have an outstanding balance on your car insurance policy for long enough, your insurance provider could send your information to debt collections. Debt collection reports show up on your credit report, so it could have an impact on your credit. Can I drive my car while my insurance is lapsed? Don’t drive your vehicle while your coverage is lapsed. Each state has its own minimum insurance requirements, and the consequences of getting caught driving while lapsed can be severe,

 What are the consequences for a lapse in car insurance coverage? Depending on where you live, the consequences can range from fees (due to making a late payment) all the way to jail time (if you’re caught driving without insurance).

• Life-altering accident costs: The reason it’s important to resolve a lapse in coverage immediately is that, by definition, you aren’t covered by car insurance. Not having car insurance—especially liability coverage, which is required in most states—exposes you to numerous risks including being personally liable for any damages you may cause while operating your vehicle during this time.
• Penalties: If you’re caught driving without insurance in states like South Carolina, penalties can be severe, including:
  • Your license being suspended
  • Your license plates being seized
  • Jail time
  • Fines
• Rate increases: Once you restart your policy, your premium may be higher depending on how long you go without coverage. If you miss a payment by even one day, your insurer may charge a flat late fee due to the lapse in coverage following your grace period.

Additionally, if your insurance does lapse, you’ll likely be considered a high-risk driver and have a more expensive premium once your insurance is restarted. As a high-risk driver, many states will also require you to get an SR-22 to prove that you’re insured.

• Impact on your driving record: In many states, such as California, auto insurance companies are required to notify the Department of Motor Vehicles about your lapse in coverage, who may note it on your driving record.
• Difficulty resuming coverage: Depending on the circumstances of your lapse in coverage, some insurers might view you as too high of a risk and deny coverage to you altogether.

How long does it take for a car insurance policy to lapse? There’s typically a 10- to 15-day grace period after you miss a payment before your policy lapses, unless you miss a renewal payment. The exact amount of time varies by state and can also vary month-to-month, so if you notice that you missed a payment, contact your insurance provider right away to see if there’s still time to avoid a coverage lapse. If you still have questions, give us a call and one of our knowledgeable representatives can help.

How long does an insurance lapse stay on my record? How long an insurance lapse affects your record varies by state, but it typically comes off within a few years. If you’re convicted of driving while uninsured in states like Missouri, several points could be added to your driving record for multiple years. However, your insurance provider might have its own designated time period following a lapse during which your premium may be impacted.

Do the police know if I’m uninsured? The police have a few ways of checking on your car insurance status. In most states, insurance databases are available to law enforcement, so they can look it up on their in-vehicle computers without even pulling you over. It’s unlikely you’d be pulled over just for lack of car insurance coverage, though. If you’re stopped for another violation like speeding, texting and driving, tailgating, or expired license plates, the officer will most likely ask to see proof of insurance. If your coverage is lapsed, you could be charged with driving uninsured.

What if my car insurance lapses and I have an accident? After an insurance lapse, your car isn’t insured. As such, if you cause a crash, you’ll likely be held liable for any bodily injuries and property damage. In most states, you’re legally required to carry at least liability car insurance. If you have an accident without the minimum required coverage in states such as California, you could face fines, have your license suspended, and have your vehicle impounded. In some states, like Montana, your first offense of driving without insurance can even result in a misdemeanor. If you’re found to not be at fault in an accident, the laws vary by state and the accident, but not having insurance coverage may reduce your chances of receiving compensation in states such as Louisiana.

Can a lapsed insurance policy be reinstated? In most cases, yes, you should be able to restart your coverage. Contact your insurance provider as soon as you notice a coverage lapse and they’ll work with you to get your policy reinstated or set you up with a new one. When you call your insurance company to restart your policy, you’ll want to be prepared with a few things on hand.

• Car insurance policy number. This will be printed on any paper bills or notices you’ve received, and it’s typically the easiest way for a representative to find your account information. If you can’t find it, the representative should be able to look it up for you.
• Full name and address. These are used to verify your identity so the representative can access your account.
• Driver’s license. If the representative can’t verify your identity based on the name and/or address, they may ask for your driver’s license number.

Keep in mind, when restarting your policy, you’ll likely have to pay:

• A fee for the original missed payment
• The amount you owe for the grace period: the time you were still covered after you missed a payment and before your policy lapsed

How do I restart my insurance after a lapse? After a lapse in coverage, your provider may allow you to reinstate or reapply for a car insurance policy. As a high-risk driver, it’s important to review your policy and understand your coverage. You may need an SR-22—a certificate of insurance that proves you carry car insurance.

How to prevent a car insurance lapse

There are several steps you can take to help avoid an insurance lapse.

• Don’t miss a payment
• Set up automatic payments for your insurance premiums. This can be done by logging in to an online account, or via a mobile app.
• Routinely check to ensure the card and account information on your file is current to prevent any errors that might stop your autopayment from completing successfully.
• Add a reminder on your calendar or phone before each due date if you don’t use autopay. This is a good way to help avoid late payments.

Sign up for digital alerts If you haven’t opted in to bill alerts or paperless billing, your insurance provider will send a notice via the postal service. By the time you receive your paper notification, the grace period could end and your insurance can lapse. With bill alerts, you should receive an email or other more instantaneous form of missed payment notification to help you stay on track.

Remember to renew your policy Your insurance provider should notify you that your renewal date is coming up, but it’s a good idea to set up your own alert, too. Adding an insurance renewal reminder in your phone or on your calendar not only helps prevent lapses, annual reviews of your car insurance can also help you save money.

Get protection even when you’re between cars Are you in between vehicles at the moment? Consider a non-owner car insurance policy, especially if you’ll be driving someone else’s car at times. It helps keep you protected by providing liability coverage in an accident you cause when borrowing a car, and it keeps your car insurance from lapsing. Life happens, and so do car insurance lapses. And while the consequences can be severe, there are ways to avoid lapses. We’re here to help, with tools like the Dairyland mobile app which allows you to set up bill alert reminders, access and update your account information, and make payments from anywhere at any time.