Content of the material
- What Happens if Car Insurance Lapses?
- Best Rates for Drivers Who Have Caused an Accident
- State Farm
- Why Do People Shop for New Car Insurance?
- What is a lapse in car insurance?
- If your policy ends due to missed payment or you forget to renew the policy
- If you are deployed overseas or studying/moving abroad
- How Long Is A Car Insurance Grace Period?
- Can You Use The Grace Period Every Month?
- Is There a Penalty for Lapse in Car Insurance?
- The bottom line: Jerry makes switching and canceling effortless
- Confirm Your Refund Eligibility
- What if I no longer need car insurance?
- What Are The Dangers Of Letting Your Auto Insurance Lapse?
- What Should You Do If You Miss A Car Insurance Payment?
- Progressive vs. State Farm: discounts
- 3 Points To Consider When Comparing New Policies
What Happens if Car Insurance Lapses?It is important that you protect yourself by having car insurance at all times. Letting your car insurance lapse isn’t uncommon, but it can be costly. Whether the lapse was on purpose or your policy was canceled because you didn’t pay your car insurance bill, your rates might go up. If an insurance company sees that you had a period of time with no insurance, they might consider you a higher risk. Driving without insurance could also result in fines, tickets and a suspended license, depending on the rules in your state. It’s important to keep continuous car insurance coverage, even if it's the minimum amount your state requires.
Best Rates for Drivers Who Have Caused an Accident
Our ratings take into account a product’s cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.
Why Do People Shop for New Car Insurance?
Shopping around for car insurance can result in savings, but many car owners renew their policies each year without checking prices from other insurance companies.
A March 2022 Forbes Advisor survey of 2,000 drivers asked what would motivate them to shop for a new car insurance policy. More than half said any of these three reasons would get them to shop around:
- A bad experience with a car insurance claim (55%)
- Looking for a better price (54%)
- Current company doesn’t have the coverage types I want (52%)
Older drivers (ages 58 to 76) chose price as the No. 1 reason to shop around, while bad claims experiences and coverage types were tops for younger drivers (ages 18 to 25).
What is a lapse in car insurance?
A lapse in car insurance is any period in which you have a registered car, but do not have car insurance.
A lapse can be as short as one day — if there’s any period you’re without car insurance, that counts as a lapse. However, some insurers may not penalize you for a short lapse of under two weeks. There may be several reasons you experience a lapse: your policy ran out, your policy was canceled because you missed a payment, you no longer drive, you were deployed and many more.
If your policy ends due to missed payment or you forget to renew the policy
A common scenario is that you missed a monthly payment or forgot to renew your policy after it expired, leading your company to cancel the policy. Once your policy is no longer in effect, your car insurance company may notify the DMV that you are uninsured.
Depending on the state, being uninsured may leave you open to fines and numerous other penalties. The longer you wait to renew your policy, the more expensive your rates will likely be as well.
>> LEARN MORE: Car Insurance Nonrenewal
If you are deployed overseas or studying/moving abroad
If you are being deployed overseas, you probably won’t be using your car much. The same goes for those living or studying abroad for a period of time. Military members have a few companies — like USAA, Geico and Esurance — that allow them to suspend car insurance while they’re away.
Suspending insurance is not considered a lapse and can spare you from raised rates. If you are studying or moving abroad, you will have to get an affidavit from your state’s DMV stating that you will not be using the vehicle.
Not every company will allow you to suspend or pause your car insurance.
If your car is financed with a lease or loan, you may not have the option to suspend coverage. If suspension is not possible, you can remove yourself from the policy (if there are others on it) or cancel your insurance. Unfortunately, that would be considered a lapse and leave you open to raised rates from your insurance company. You may be able to avoid any DMV and state penalties, however, by filling out an exemption form from the DMV.
>> LEARN MORE: The Best Car Insurance for Veterans and Service Members
How Long Is A Car Insurance Grace Period?
As we mentioned, grace periods vary between 24 hours to a month – quite a large range. State car insurance laws also come into play if your plan lapses.
All but two states (New Hampshire and Virginia) require some form of car insurance at all times, and even those require confirmation to drive without insurance from the DMV. So, in a nutshell, you can’t simply jump in a car without insurance documentation.
The specific length of a grace period and steps that must be taken before a lapse in coverage come down to your location and your plan. If possible, get this information in writing from your company before you face late payments or create a gap in your coverage.
Can You Use The Grace Period Every Month?
Typically, car insurance companies place limits on how many times they will accept late payments. If your company has no limits on how many times you can take advantage of your grace period, it’s still not a great idea to depend on this safety net.
Many providers charge late fees or raise premiums when your contract renews, significantly adding to your overall insurance rates in the long run.
Is There a Penalty for Lapse in Car Insurance?Almost every state requires you to have car insurance to legally drive your car. Even if you’re driving a registered car, the penalties you’ll face if you’re caught driving without insurance may include:
- Fines of up to $5,000
- License suspension
- Impounding of your car
- Jail time
The bottom line: Jerry makes switching and canceling effortlessHey, we get it: people lead busy lives, time is at a premium, and no one likes having to deal with the hassles of switching and canceling car insurance. If you’re wondering how to switch quickly and easily, the solution is obvious.Once you sign up with Jerry, there’s no effort required on your part when you decide to switch car insurance. You click a button and Jerry takes care of the rest. The app sets up your new policy and cancels your old one.You don’t have to deal with awkward phone calls or pushy sales agents. You just get to enjoy more money in your pocket.With its ease of use, it’s no wonder that Jerry has earned a stellar 4.6/5 rating on the App Store from over 5,000 customers.MORE: Find car insurance quotes online
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit the use of credit-based insurance scores as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts, and Michigan.
Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Five states prohibit the use of credit-based insurance scores as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts, Michigan and Washington.
Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.
Incidents: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction and lapse in coverage.
Confirm Your Refund Eligibility
Refund eligibility can typically be determined by how far in advance you paid for your insurance. If you prepaid for a 6 month or 12 month policy, you will likely have no issue when requesting a refund. If, however, you are on a month-to-month plan, you may not be eligible for a refund.
The only way to know for sure is to contact your insurance representative and ask for assistance. They are there to help!
What if I no longer need car insurance?
If you’re not driving, you obviously won’t need auto insurance. Perhaps you’ll be traveling out of the country, biking, or just bumming rides off friends. Keep in mind, that if you get behind the wheel again, you might pay an increased rate. That’s because insurance companies may consider you a riskier driver than those who keep active policies.
What Are The Dangers Of Letting Your Auto Insurance Lapse?
If your coverage lapses due to missed payment or a delay after you purchase a new car, how long can you be without car insurance? It’s important to stay off the roads until you can pay your balance or set up a plan. Penalties for not having liability coverage increase the longer you’ve driven without it.
Getting into an accident can cost tens of thousands of dollars for you and the other person involved if you do not have active auto insurance in place. In addition to these large expenses, there are also legal consequences for driving without insurance based on state laws.
Depending on where the accident occurred, you could face:
- License points
- License and registration suspension
- Vehicle impounding
- Jail time
- Restrictions on car insurance in the future
Many companies offer same-day or next-day car insurance, so be sure you have a plan in place and proof of insurance before you get behind the wheel of a car.
What Should You Do If You Miss A Car Insurance Payment?
Let’s say things aren’t quite lining up this month, and you know you’ll be two to three days behind on your payment. We recommend starting with these two steps:
- Look at your policy for specifications on missed payments.
- Check state laws on car insurance grace periods on the local Department of Motor Vehicles website.
Though it’s important to pay your premium as quickly as possible, check how your grace period works to ease your worries about insurance lapses. Call your lender to alert them of the delay and confirm your findings if you are concerned.
If your car insurance does lapse, call your company as soon as possible to figure out how to reinstate your plan or buy a new plan.
You can also reassess your current policy limits. If full coverage is too expensive, you may be able to get by on minimum coverage to save some money for a while.
Progressive vs. State Farm: discounts
Both Progressive and State Farm offer great auto insurance discounts for drivers who want to save money on their premium. While there is some overlap in the discounts that these insurers offer, State Farm offers some discounts that Progressive does not, and vice versa. Here are some of the auto insurance discounts available from each carrier:
- Teen driver discount: Progressive offers a special teen driver discount that may prevent your premium from increasing significantly after adding a newly licensed driver to your policy.
- Snapshot program: With the Snapshot usage-based insurance safe driver program, drivers could save an average of $146 on their premium by practicing safe driving behaviors, according to Progressive’s website.
- Continuous insurance discount: If you switch to Progressive from another insurance company, you could save money based on the length of time you were insured with the previous carrier.
- Vehicle safety discounts: State Farm may lower your auto insurance rate if your vehicle is equipped with certain safety features, like front air bags, seat belts and an anti-theft system.
- Drive Safe & Save program: The Drive Safe & Save usage-based insurance program can help adult drivers save up to 30% on their auto insurance premium by demonstrating safe driving skills.
- Steer Clear program: The Steer Clear program is designed to reward drivers under age 25 with a lower rate if they are claims-free for three years and complete the safe driver training program.
3 Points To Consider When Comparing New Policies
If you've made the decision to leave your current policy, it is time to start shopping for a new policy. You'll want to start immediately to give yourself the time you need to consider your options.
Where to start?