NORMAN v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

What Is A Car Insurance Grace Period?

A car insurance grace period is the amount of time your insurer or your state laws allow you to either delay paying for your car insurance premium without a lapse in coverage, or the time between purchasing a new car and auto insurance for that vehicle.

Let’s say you have a difficult month or you simply forget to pay your premium. Will the company cancel your plan if you don’t pay your car insurance right on time?

It depends. Both individual policies and state laws set specific regulations on how long you can delay payment before your car insurance coverage is canceled.

In some cases, your car insurance company is allowed to cancel your plan after one day without payment, and your plan will lapse because of a non-payment, leaving you uninsured. You may be able to pay a fee to reinstate your plan immediately.

If you currently have auto insurance on a car, you typically have a grace period of seven to thirty days before you have to report your new car to your insurance company with or without a penalty.

State Laws On Auto Policy Grace Periods

Some states require car insurance companies to provide a written letter with the intent to cancel your plan before doing so. In short, it all comes down to your policy and your state laws.

When reading through state laws on car insurance policies, look for grace period and cancellation regulations.

Some states require companies to give you 10 to 20 days to get back on track with payments. In other cases, such as in Wisconsin, car insurance companies can cancel your plan the moment you miss your due date.

Do All Carriers Offer A Car Insurance Grace Period?

In short, no, but many have car insurance grace periods to remain competitive, so it’s important to talk to an insurance agent about plan details. Some companies may even also allow a specific number of late payments before enforcing stricter regulations – such as if you’re late on your payments three months in a row.

Other companies may charge a late fee or set a higher premium the next time you renew your auto insurance.

Most companies do not want to lose you as a customer over one late payment. However, since car insurance plans are based on trust, be sure to do your due diligence to alert your company of any complications.

Best Rates for Adding a Teen Driver

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What happens when your car insurance is canceled for missing a payment?

If you miss a car insurance payment, you’ll receive a legally required notice of cancellation from your insurer. This notice may come in the mail or by a phone call or email.

You’ll usually have 10 to 20 days between the date of the cancellation notice and the date you are no longer covered. The exact amount of time differs by state. After that, your insurance will officially lapse and you’ll no longer be able to drive your car legally. In some states, letting your insurance lapse also voids your registration — either right away or a few weeks after your insurance lapses. But no matter where you live, the longer you wait before rectifying the problem, the greater the consequences will be. So make sure you contact your insurance company immediately.

Long-term consequences of canceled insurance due to missed payments

If your car insurance lapses or is canceled, whether it’s because of nonpayment or any other reason, you will likely face financial ramifications of some kind. The consequences can continue even after you have reinstated your insurance. Here are some possible outcomes of missing your car insurance payments.

Administrative fees at the DMV: Some states will charge you for even a brief lapse in insurance coverage. For example, in New York, drivers have to pay $8 per day for up to 30 days during which their insurance was lapsed, with increased penalties thereafter. Car registration or driver’s license suspension: Nearly every state requires drivers to insure their cars in order to register them, and many states require insurance companies to notify them if you let your insurance lapse. This could result in the automatic suspension of your car’s registration or your driving privileges, leaving you unable to legally drive. You might even be required to carry an SR-22 if you are caught driving while uninsured, especially if you cause an accident. Higher auto insurance rates: Insurance companies like to see that drivers can reliably pay their bills on time every month. People who let their coverage lapse, even for a short amount of time, will likely see an increase in car insurance prices the next time they renew. Repossession of a loaned/leased car: Most car lenders require you to maintain full insurance coverage on the vehicle as long as the vehicle is financed. If your car lender finds out you are not carrying insurance on the vehicle, it may repossess the car. Your credit score can drop: If you owe money on your car insurance and your insurer passes the debt to a collection agency, it will likely impact your credit score. This can affect your ability to get a credit card or loan, and the derogatory mark will remain on your credit report for up to seven years.

8. Car Insurance Lapse Grace Periods Explained

Carrying auto liability coverage is required for drivers in almost every state, so it’s important to get insurance again as soon as possible.(8)

Car Insurance Cost by Driving Profile

Here’s a look at car insurance rates based on averages nationwide among the largest insurance companies.

Type of driverAverage annual car insurance cost Good driver$1,569 Driver who caused an accident with property damage$2,272 Driver who caused an accident with an injury$2,304 Driver with one DUI$2,623 Driver with one speeding ticket$1,947 Driver with poor credit$2,876 Driver caught without insurance$1,822 Rates are based on a female driver, age 30, insuring a Toyota RAV4 with liability coverage of 100/300/100 and collision and comprehensive insurance. Averages are based on rates from 11 large auto insurance companies.

15. Best Car Insurance Companies Of March 2022 – Forbes Advisor

State Farm is currently the largest auto and home insurer in the U.S. It sells vehicle insurance for cars, motorcycles, RVs, (15)

Car insurance lapse for military personnel

At Progressive, you’ll still get our Continuous Insurance Discount if you had a gap in insurance because you were deployed overseas.

Our Recommendations For A Car Insurance Grace Period

In our industry review, we highlighted car insurance providers that put customers first – through comprehensive coverage plans, affordable rates, and assistance during the quotes and claims processes. High customer care ratings are also generally a sign that a company will be easy to work with in the event of a payment slip-up.

Here are a few top contenders for auto insurance. Enter your zip code or call (844) 246-8209 to start comparing free car insurance quotes in your area. 

 

#1 Progressive: 4.6 Stars

As one of the largest providers in the country, Progressive addresses its car insurance grace period online. Though it does not specify the number of days, it does provide detailed instructions on how to handle missed payments. It also highlights that military members deployed overseas receive a discount even if insurance lapses while away.

Here are some other top things to know about Progressive:

  • Received an A+ financial strength rating from AM Best
  • Offers usage-based insurance through the Snapshot® program
  • Does not offer the lowest rates in the country, but does offer many discounts for specific groups like students and safe drivers

Read more in our full review of Progressive insurance.

#2 Geico: 4.6 Stars

Geico is also very clear about its car insurance grace period. If you miss a payment, you will receive a notice clarifying how long you can delay your bill without plan cancellation. Overall, Geico is known as one of the most affordable and customer-focused car insurance companies in the country.

Here are some top things to know about Geico:

  • Has nearly 14% of the United States auto insurance industry, according to the National Association of Insurance Commissioners
  • Offered in all 50 states with some local offices
  • Received a 77.59 out of 100 Reader Score from Consumer Reports

Read more in our full review of Geico insurance.

#3 State Farm: 4.6 Stars

State Farm doesn’t list its car insurance grace period length online. However, the company does allow you to combine your monthly payment plans with your other State Farm plans and offers billing reminders or automatic debit.

Here are some top things to know about State Farm:

  • Offers extensive coverage, including perks like roadside assistance and rental car coverage
  • Earned an A++ rating from AM Best, which is the highest rating possible
  • Known for its large discounts for new drivers, students, and bundling plans

Read more in our full review of State Farm insurance.

We always recommend getting several auto insurance quotes before making a decision. In addition to your premium, be sure your company has a history of customer service. A strong service team can help you through tricky payment months or buying a new car.

Frequently Asked Questions

Do you have a 10-day grace period for car insurance?

A 10-day grace period for car insurance payments is a common length, though companies can give anywhere from 0 to 30 days. Don’t assume you have a 10-day grace period. Check with your car insurance company first, as it could be as short as one day.

What happens if I pay my car insurance a day late?

In most cases, your company will allow a grace period of at least a few days. However, in some states, auto insurance companies can cancel your policy after a single day of nonpayment. If a company cancels your existing policy, getting new car insurance can be more expensive because of a lapse.

Does The General car insurance have a grace period? Yes, The General Insurance offers a grace period of up to 30 days depending on the state. Be aware that the grace period may be as short as a few days in some states, so talk to your auto insurance agent to get the exact timeframe.

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