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Car insurance after lapsed coverage

Fact-checked with HomeInsurance.com

If you end up with a lapse in your auto insurance coverage, it will likely cost you. When insurers see that lapse, it identifies you as a risk, which makes you costlier to insure. Many insurers may not want to issue a policy to you if your current policy has lapsed. For those that do write coverage for drivers with lapsed insurance, your car insurance company will likely charge a higher premium. However, driving without insurance is an even bigger risk. You could lose your license, have your vehicle’s registration suspended, pay out of pocket for damages from an at-fault accident and more.

So how do you get your auto insurance after a lapse? We’ll explore this question and discuss the risk of having a lapse in coverage and where you may be able to find insurance coverage if you are currently experiencing a lapse.

What is a car insurance lapse?

An auto insurance lapse occurs when your insurance coverage ends without having an active policy elsewhere. A lapse typically occurs when a policyholder does not pay their premium, resulting in the cancellation of coverage. However, lapses can occur if you switch car insurance companies and your new policy’s start date is later than your old policy’s end date. For example, if you cancel your current insurance policy today but your new policy starts next week, that is considered a lapse in coverage.

Which states have a penalty for a lapse?

Different states have different laws around auto insurance, but many have penalties for allowing your coverage to lapse. In most cases, these penalties start small for the first offense and then increase for each subsequent offense. While most penalties start with monetary fees, driving without insurance can result in severe penalties, such as license suspensions or jail time.

StatePenalties
AlabamaUp to $500 for first offense and up to $1,000 for future offenses
AlaskaLicense suspension
ArizonaMinimum of $500 for first offense and $750 for second offense
Arkansas$50-250 first offense and $500-$1,000 for additional offenses
California$100-$200 for first offense and $200-$500 for additional offenses
ColoradoMinimum of $500 for first offense and $1,000 for future offenses
Connecticut$100-$1,000 in fines and license suspensions
District of ColumbiaA $500 fine for operating the vehicle and up to $2,500 for owning the vehicle
Delaware$1,500 to $2,000 for first offense and $3,000 to $4,000 for later offenses
FloridaReinstatement fee of $150 for first offense and $250 to $500 for later offenses
Georgia$200 to $1,000 for each offense
Hawaii$500 for first offense and at least $1,500 for the second offense
Idaho$75 for the first offense and up to $1,000 for further offenses
Illinois$501 to $1,000 for first and second offense and $1,000 additional offenses
Indiana$150 reinstatement fee for first offense and up to $300 for subsequent offenses
Iowa$250 in fines
Kansas$300 to $1,000 for first offense and $800 to $2,500 for later offenses
Kentucky$500 to $1,000 for first offense and $1,000 to $2,500 for later offenses
LouisianaUp to $500 for each offense
Montana$250 to $500 for each offense
Maine$100 to $500 for each offense
MarylandUp to $2,500 in fines for each offense
MassachusettsUp to $500 for first offense and $500 to $5,000 for additional offenses
Michigan$200 to $500 for each offense
Minnesota$200 to $1,000 for first offense and up to $3,000 for additional offenses
MississippiUp to $500 in fines for each offense
MissouriUp to $300 in fines for each offense
Nebraska$100 in reinstatement fees for each offense
Nevada$250 to $1,000 for first offense and $500 to $1,000 for additional offenses
New HampshireInsurance is not required, no penalties
New Jersey$300 to $1,000 for first offense and up to $5,000 for additional offenses
New MexicoUp to $300 for first offense and up to $1,000 for later offenses
New York$150 to $1,500 for each offense
North Carolina$50 for first offense, $100 for second and $150 for third
North Dakota$150 to $1,000 for first offense and $300 to $5,000 for later offenses
Ohio$160 reinstatement fee for first offense, $360 for second and $660 for additional offenses
OklahomaUp to $250 for each offense
Oregon$130 to $1,000 for each offense
PennsylvaniaUp to $300 for each offense
Rhode Island$100 to $500 for first and second offense and up to $1,000 for additional offenses
South CarolinaRegistration fee of $550 for each offense
South DakotaUp to $500 for each offense
TennesseeUp to $100 for each offense
Texas$175 to $350 for first offense, $350 to $1,000 for second and later
UtahAt least $400 for first offense and at least $1,000 for later offenses
Vermont$250 to $500 for each offense
Virginiaup to $1,000 for each offense
Washington$250 or less for each offense
West Virginia$200 to $5,000 for each offense
WisconsinUp to $500 
Wyoming$250 to $750 for first offense and $500 to $1,500 for second 

*Sourced from comsumerfed.org

How to avoid a car insurance lapse

When all goes correctly, you shouldn’t experience a lapse in car insurance. If you make payments on time and avoid a lapse when switching coverage, you should be able to avoid a coverage lapse.

Pay premiums on time

The number one thing your insurer wants to see is that monthly bills are being paid in full and on time. Multiple missed payments or making partial payments for too long will lead to the insurer canceling your policy, which could lead to a coverage lapse if you do not have an active policy elsewhere. 

Be aware of policy dates

If you are considering switching to car insurance companies, it is important to put your new policy into effect on the same date your previous policy is canceled. The best way to handle this is to secure your coverage with your new insurance company and then call your current insurance company and tell them what cancellation date to use, which should be the effective date of your new policy. Make sure to talk in detail about this with insurance agents at both companies to avoid a lapse in coverage.

Rate increases after a lapse

When a customer experiences a lapse in their auto insurance, car insurance companies are wary of them. This lapse tells insurers that you have some barrier to completing your end of the contract. Namely, making your premium payments on time. It also implies that you may drive while uninsured, which is the type of disregard for vehicle laws that insurers see as a red flag of risky driving.

Thankfully, once you obtain insurance coverage again, you could see your premiums decrease over time if that coverage is maintained. Also, without a lapse in coverage for some time could mean you are eligible for insurance coverage with more carriers, giving you more options to find competitive premiums that suit your budget.

Cheapest car insurance companies after a lapse

If you’ve dealt with a lapse in car insurance coverage, you’ve likely encountered some barriers to getting new auto insurance. As a result, it may be hard to find a company that will insure you once you’ve experienced a lapse in your coverage. Below are a few auto insurance providers that may offer coverage for drivers experiencing a lapse. 

  • State Farm 
  • SafeAuto 
  • Progressive 
  • Geico 
  • Acceptance

The takeaway

  • Letting your car insurance lapse can be costly and risky.
  • There are ways to prevent an insurance lapse.
  • Driving without insurance is illegal and expensive.
  • Some insurance companies do not offer insurance to lapsed drivers, but others do.

It’s not the end of the world if your car insurance coverage lapses, but it isn’t good. A lapse in coverage will cost you and make driving your vehicle illegal. To avoid such lapses, pay your premiums on time and ask your insurer about discounts or lesser coverage if those premiums are too steep for your budget.

When trying to find auto insurance after a lapse, it will likely cost you more. Still, some companies offer insurance policies to high-risk drivers.

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