The main question about lapses in car insurance is what they are. How do car insurance lapses happen? What happens when there is a lapse in insurance coverage? And, of course, how do you prevent car insurance lapses?
What is a Car Insurance Lapse?
A car insurance lapse is the period of time when your insurance policy becomes inactive and you lose coverage.
Your car insurance policy can become inactive for several reasons. However, when a policy lapses, the effect is always the same. You no longer have valid insurance coverage when driving your vehicle. A lapse in coverage can be knowingly or unknowingly on the driver’s part.
Driving without an active policy can carry a series of penalties that can impact you and cost you a lot in fines.
The good news is that car insurance lapses can be resolved quickly and efficiently before the consequences get too dire.
What Does it Mean to Have Your Car Insurance Lapse?
Whenever your auto insurance policy expires or is canceled, the period known as auto insurance lapse begins. Your auto insurance is kept as a record and a period of being uninsured shows up as a gap. That’s actually where Gap Car Insurance gets its name from.
When your coverage lapses, you should immediately reinstate your policy, with or without your previous auto insurer.
After two days, you’ll notice that your auto insurance rates aren’t as low as before.
Driving without auto insurance can also get you in trouble with the police if you are pulled over for something as simple as running a stop sign.
Is there a grace period for a car insurance lapse?
When your auto insurance policy lapses (usually because you missed a payment), many insurance companies give you a grace period to catch up and avoid a lapse in coverage. The length of the insurance lapse grace period varies but is usually 10 to 20 days and might include a restoration fee.
Suppose you don’t get insurance after the grace period. In that case, you’ll have problems like difficulty reinstating coverage, higher insurance rates, or buying a new policy.
What are the penalties for a lapse in auto insurance?
A lapse in coverage can be costly, especially in states where insurance is mandatory (all states except Virginia and New Hampshire). Without a policy, you’ll be financially responsible for all damages and property damage if you get into an accident.
Additional penalties apply if you get caught driving uninsured, even if you don’t get into an accident.
Below is a concise, state-by-state (plus Washington, D.C.) summary of typical penalties for driving without auto insurance. Always confirm current rules with your state’s DMV or Department of Insurance, as laws and fees may change.
- Alabama: Driving without insurance can lead to a $200–$500 fine, suspension of vehicle registration, a $200 reinstatement fee, and higher premiums.
- Alaska: You may face at least a $500 fine, possible license suspension, and SR-22 requirements for repeat offenses, along with higher insurance rates.
- Arizona: First offenses carry a $500 fine, possible license/registration suspension, and SR-22 for repeat violations, plus increased premiums.
- Arkansas: Expect a $50–$250 fine, suspension of registration, reinstatement fees, and higher insurance costs.
- California: Fines start at $100–$200 but can exceed $400 with assessments, and you risk vehicle impoundment. Insurance premiums typically rise.
- Colorado: A minimum $500 fine, 4 license points, potential license suspension, and SR-22 for repeat offenders, with higher premiums likely.
- Connecticut: A $100–$1,000 fine and a possible one-month registration suspension; reinstatement fees and higher rates follow.
- Delaware: Fines range $1,500–$2,000 (first offense), with registration suspension and potentially higher premiums.
- Florida: License and registration can be suspended for up to 3 years, with $150–$500 reinstatement fees and higher insurance costs.
- Georgia: Fines of $200–$1,000, up to 12 months in jail in severe cases, plus suspension of license/registration and premium hikes.
- Hawaii: A $500 fine for a first offense (up to $5,000 for repeats), possible jail time, and increased insurance rates.
- Idaho: Fines between $75–$1,000, potential license suspension, and SR-22 for repeats; rates generally go up.
- Illinois: $500–$1,000 fine, registration suspension, a $100 reinstatement fee, and higher premiums.
- Indiana: A 90-day to 1-year license suspension, $150–$300 reinstatement fee, and SR-22 requirement for multiple offenses. Premiums rise.
- Iowa: A $250 fine or possible community service, with potential license/registration suspension and higher rates.
- Kansas: $300–$1,000 fine, up to 6 months in jail, license or registration suspension, and likely premium increases.
- Kentucky: $500–$1,000 fine, up to 90 days in jail, registration revocation, and increased insurance rates.
- Louisiana: $500–$1,000 fine, possible license/registration suspension, reinstatement fees, and higher premiums.
- Maine: $100–$500 fine, license suspension until proof of insurance, SR-22 for repeats, and higher rates.
- Maryland: $150 for the first 30 days plus $7/day (max $2,500), registration suspension, and higher insurance premiums.
- Massachusetts: $500–$5,000 fine, up to 1 year in jail, license suspension, and premium surcharges.
- Michigan: $200–$500 fine, up to 1 year in jail, possible driver responsibility fees, and insurance hikes.
- Minnesota: Up to $1,000 fine, possible 90 days in jail, license revocation, and increased premiums.
- Mississippi: $1,000 fine, license suspension for up to 1 year (or until insured), and higher insurance rates.
- Missouri: Up to a $500 fine, possible 15 days in jail, suspension, reinstatement fees, and premium increases.
- Montana: $250–$500 fine, possible jail for subsequent offenses, license suspension, and higher rates.
- Nebraska: Registration/license suspension, reinstatement fees, SR-22 filing, and increased premiums.
- Nevada: $250–$1,000 fine (first offense), license suspension, SR-22 for repeat offenses, and higher rates.
- New Hampshire (insurance generally not mandatory unless certain conditions apply): $500–$1,000 fine, license/registration suspension, SR-22 for 3 years, and premium hikes if coverage is required and lapses.
- New Jersey: $300–$1,000 fine, community service, up to 1-year license suspension, a $250 surcharge for 3 years, and higher insurance costs.
- New Mexico: $300 fine, up to 90 days in jail, registration suspension, and increased premiums.
- New York: $150–$1,500 fine, up to 15 days in jail, license/registration revocation up to 1 year, and premium spikes.
- North Carolina: A $50 fine (first lapse), $100 (second), $150 (third+), plate revocation, reinstatement fees, and higher rates.
- North Dakota: Minimum $150 fine, possible license suspension if no proof of insurance, SR-22 for repeats, and rate increases.
- Ohio: License suspension, $100–$600 reinstatement fees, SR-22 requirement (3–5 years), and higher premiums.
- Oklahoma: $250 fine, up to 30 days in jail, license/registration suspension, and insurance rate hikes.
- Oregon: $130–$1,000 fine, license suspension, SR-22 for 3 years, and higher premiums.
- Pennsylvania: $300 fine, 3-month registration suspension, a $176 reinstatement fee, and increased insurance costs.
- Rhode Island: $100 fine (first offense), up to $1,000 for subsequent offenses, possible suspension, and higher rates.
- South Carolina: $550 fine or 30 days in jail, license/registration suspension, a $200 reinstatement fee, SR-22, and premium hikes.
- South Dakota: $100 fine, possible 30 days in jail (for repeat offenses), potential license suspension, and higher premiums.
- Tennessee: $300 fine (first offense), license/registration suspension, SR-22 for repeats, and increased rates.
- Texas: $175–$350 fine (first offense), $350–$1,000 for repeats, possible vehicle impoundment, SR-22, and higher premiums.
- Utah: $400 fine (first offense), license suspension, SR-22 for 3 years, and higher insurance rates.
- Vermont: Minimum $100 fine, license suspension until proof of insurance, reinstatement fees, and higher premiums.
- Virginia: $600 uninsured motor vehicle fee if caught, license/registration suspension, FR-44/SR-22 requirements, and premium increases.
- Washington: Up to a $550 citation for driving without insurance, possible license suspension if in an accident, SR-22 for repeats, and higher rates.
- Washington, D.C.: $500 fine (first offense), up to $1,000 for repeats, license/registration suspension, reinstatement fees, and higher premiums.
- West Virginia: $200–$5,000 fine, 15 days to 1 year in jail for serious/repeat offenses, license suspension, and rate hikes.
- Wisconsin: Up to a $500 fine, registration suspension, SR-22 for repeat offenses, and higher insurance rates.
- Wyoming: $250–$750 fine, up to 6 months in jail (rare), possible license suspension, and premium increases.
How long does a car insurance lapse stay on your record?
The effects of a lapse in auto insurance don’t end when you reinstate the policy. Depending on your state, a lapse can stay on your driving record for up to 5 years.
Lapses in coverage will also get you higher rates and make it harder to get insurance in the future. Insurance companies will classify you as a high-risk driver if you have a lapse in coverage, making it challenging to get affordable policies.
What Causes Lapses in Car Insurance?
A couple of things can nullify your auto insurance policy and coverage. Lapses can be the result of the following:
1. Missed payments
Missing your monthly premium payments will most often result in your insurance company canceling your policy. It’s a simple business principle—you must pay to receive the service.
2. Late Payments
Even if you pay for your auto insurance policy later, missing the deadline can look bad if it is a regular habit. Insurers will only take notice once when this occurs. If it happens again, they may cancel your policy.
3. Expired Policy
Around every six months, you’ll have to contact your insurance company and renew your policy to continue receiving coverage and to have current proof of insurance. Foregoing this is another way to cause a lapse in your coverage.
4. Cancelled policy by insurance company
After a series of traffic violations or even after a DUI, your insurer may cancel your auto policy rather than raise your premiums. You can only find another car insurance company within a week to avoid the consequences of a lapse in coverage.
How Much Do Your Car Insurance Rates Increase After a Lapse?
A car insurance lapse ties into your premiums because a potential insurer looks at your insurance history. Continuous coverage is something that insurers both look for and expect most of the time.
Suppose insurers notice any gaps in a driver’s insurance history. In that case, the process has an added risk for insuring the now considered a high-risk driver. Insurers will charge you a higher rate based on your policy’s length.
Here are the days of a policy lapse and how much it affects an annual rate of $2,500:
- First couple of days - The first couple of days of a lapse don’t add much to the annual rate. The hope is that you’ve already found a new insurer and policy. Some insurers may offer a brief grace period for missing payment. However, this is not set in stone and varies depending on the insurer and state.
- Fifteen days after - After two weeks of being uninsured, you will be paying at least $250 per month more for an estimated total premium of $2,750 per year.
- Thirty days after - Assuming you have a good driving history, a month of lapsed car insurance shouldn’t increase your rates from what they already are. Still, upon seeing you have a month without coverage, the insurer will charge you more than usual for your annual premium.
- Forty-five days after - The actual increase in your premium happens between the 30 and 45-day mark. Say that your yearly premium was $2,750 after one month of lapse; within those 15 days, your premium will increase to nearly $3,500. Since day one, your rates have been raised by $1,000.
- Sixty days after - At this point, a $1,000 rate increase is the very least you may face. It would help if you had coverage by now unless you want your premium to increase to $4,500 after 15 more days.
What if You Lease or Finance Your Vehicle?
What happens when your car insurance lapses on a leased vehicle depends on what is written in the original vehicle loan terms.
Vehicle leasing companies expect drivers to have full coverage car insurance. In the event of an auto insurance lapse, a leased car will be repossessed, or a new policy can be bought with much higher insurance rates.
How Do You Avoid a Lapse in Auto Insurance?
The good news is that car insurance lapses are preventable. All it takes is awareness and communication with your insurance provider.
What you can do personally to avoid car insurance lapses is:
1. Make payments on time and set up automatic payments
Make your monthly auto insurance payments on time to continue receiving coverage. You can set up automatic payments for your monthly car insurance premiums.
2. Renew your policy on time
Keep track of when you need to renew your auto insurance policy with your insurer. This is another thing that can be automated, like your monthly payments, so you can always rest assured that it gets done.
3. Maintain a Clean Driving Record
Insurance companies watch your driving record very carefully. They may be more lenient towards safer drivers if something were to happen.
4. Find affordable coverage
You should always be able to afford your car insurance payments every month. The best auto insurance rates can be found by shopping around or seeking discounts. Every insurer prices its policies differently, giving you plenty of options. Always ensure you pay for at least your state’s minimum liability coverage.
What Do You Do When Your Car Insurance Coverage Lapses?
When faced with an auto insurance lapse, you should immediately contact your insurance provider to see if they can reinstate your policy. If not, you’ll have to find a new car insurance policy and possibly a new insurer.
Shopping around the local and national insurance carriers for quotes is one option. However, it would help to be mindful of your time with uninsured vehicles.
Obtain car insurance quotes from different auto insurers, and you’ll find that every insurer has its way of judging gaps in coverage, so find the auto insurance company with the most affordable rate.
Above all, don’t drive your vehicle without insurance. You may face extensive fines, license suspension, and even jail time. Your vehicle may also be impounded. Then, you not only have to get a new auto policy, but you also have to reinstate your driver’s license, which can be very costly. The best you can do is stay on top of your insurance policy to prevent a lapse.
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Frequently Asked Questions
Can I drive if my insurance has lapsed?
No, driving without insurance is illegal in almost every state. If you get pulled over without insurance, you can face fines, suspension of your license or registration, or even revocation of your vehicle registration.
Will my license or registration be suspended if my insurance lapses?
The DMV is notified in many states when an insurance policy is canceled or expires. If you don’t get a new policy soon, your registration and/or license could be suspended depending on your state’s laws.
Is there a penalty for a short lapse in coverage, even if it’s only for a few days?
Even a short coverage gap can have consequences. While some insurance companies may be lenient if you reinstate coverage quickly, you may still face higher premiums or additional fees. You’ll be considered uninsured and penalized if you get pulled over during the lapse.
How do I check if my insurance has lapsed or is about to expire?
To check your insurance status, check the policy’s expiration date on the declarations page or log into your insurer’s online account. Most insurance companies also send renewal notices or cancellation warnings via mail, email, or text. If you’re unsure about your coverage, contact your agent directly.
Are there exceptions to a lapse if I’m not driving my vehicle?
Suppose your vehicle is in storage and not being driven on public roads. In that case, you may be able to suspend certain coverages. However, state laws vary, and many states still require at least comprehensive coverage for theft, fire, or damage while the vehicle is stored. Always check your state’s requirements before making changes to your policy.
How do I avoid a lapse in coverage when switching insurance providers?
To avoid any gaps in coverage when switching car insurance policies, ensure your new policy takes effect before or on the same day your current policy ends. Continuous coverage helps you avoid penalties and keep your insurance rates low.
How do I reinstate my license or registration after an insurance lapse?
To reinstate your license or vehicle registration, you may need to provide proof of a new insurance policy—some states may require an SR-22—pay reinstatement fees, and fulfill other state-specific requirements. Contact your state’s DMV or licensing authority for instructions on the reinstatement process.
