What Happens If Car Insurance Lapses?

Updated 3 days ago
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The car insurance company is no longer obligated to cover any claims if your car insurance lapses. It leaves you with having to pay out-of-pocket expenses for any accidents or damage to your vehicle. Not only this, but you're also subject to much higher insurance premiums when you do get a new policy.

What are the penalties for not paying my insurance?

Driving without your state's required minimum liability insurance is illegal. Without this coverage, you face many penalties, including:

  • A fine
  • License and registration suspension
  • Car impoundment
  • Jail time
  • Community service
  • Increased auto premium rates
  • Paying out-of-pocket for an accident

How to avoid a lapse in auto insurance

There are ways for you to avoid a major lapse in your insurance. We've found some of the fastest solutions, such as:

  • Call your insurer: If your policy was canceled due to non-payment, contact your insurance to get your auto policy reinstated. You may be subject to an additional reinstatement fee on top of your monthly premium. Still, it saves you from facing other severe penalties.
  • Join a friend or family member's policy: If you're not able to reinstate or buy your own policy, then join another. Ask a close family member or friend to list you as a driver under their policy.

3 things to consider about a lapse in your insurance

  • You're able to have a canceled policy reinstated by making a payment and paying any additional fees.
  • Not all lapses in your auto insurance cause an increased auto premium. If you've only gone without insurance for a few days, it typically doesn't affect your rates.
  • If you're a teenager and you aren't able to join your parent's policy, a lapse in your insurance might be forgiven. However, this isn't a common exception and you still can't legally drive your car on the road.

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