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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’s likely going to cost you. When insurers see that lapse, it identifies you as a risk, which makes you costlier to insure. Your car insurance company is going to want to pass that increased price back to you. You may even be at risk of losing your license if you continue to drive while uninsured.

So how do you get your auto insurance back again? And just how much is this lapse going to cost you? We’ll explore these questions and discuss what to do in the case of a car accident during a lapse in coverage.

What is a car insurance lapse?

An auto insurance lapse occurs when your insurance policy cancels without having coverage elsewhere to replace it. Laws around car insurance lapses vary by state. Still, most require insurance companies to provide customers with a grace period of between 10 and 20 before deactivating their insurance. So, when wondering how long can you be without insurance, know that it is only for a little while.

The most common causes of auto insurance lapses are not paying premiums and car accidents. Less commonly, a policy might be canceled if the insurer believes the customer has committed fraud or develops health complications that make them unsafe to drive.

Which states have a penalty for a lapse?

Different states have different laws around auto insurance, but many have penalties in place for allowing your coverage to lapse. In most cases, these penalties start small for the first offense and then continue to increase for each subsequent offense. While most penalties start with monetary fees, the act of driving without insurance can result in jail time, and many states may suspend your license each time your insurance lapses.

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 are honest with your insurer, make payments on time, don’t lose your legal ability to drive and keep your car in good order, then your insurance shouldn’t 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. If your policy is too expensive, consider switching to a cheaper company.

Avoid traffic violations

Drive safe. It pays off in numerous ways. Traffic and moving violations will lead to increased rates at first. Still, they can eventually cause your insurer to cancel your auto insurance altogether.

Maintain your license

If you are driving without a license and your insurer finds out, they will likely cancel your insurance policy until you regain your license and provide proof.

Maintain your vehicle

While a safe car can lead to discounts, the more damaged a vehicle is, the more expensive it is to cover. If your car’s safety and maintenance degrade far enough, your insurer may cancel your auto insurance policy.

Rate increases after a lapse

According to one insurance company, your premium could increase as high as 35% to 69% for being high risk. Car insurance companies say you will likely be charged a higher premium for having a lapse in coverage.

When a customer experiences a lapse in their auto insurance, it makes car insurance companies 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 might drive while uninsured, which is the type of disregard for vehicle laws that insurers see as a red flag of risky driving.

Thankfully, these things usually are looked at in three to five-year segments. Meaning that even if you have experienced a lapse in coverage, if you can maintain it for the next three to five years, you should be able to remove that price hike on your premiums.

Cheapest car insurance companies after a lapse

If you’ve dealt with a lapse in car insurance coverage, then you’ve likely encountered some barriers to getting new auto insurance. Many car insurance companies will refuse to work with a customer who has a history of lapsed coverage, as this paints them to the insurance company as a big risk. As a result, it can be hard to find a company that will insure you once you’ve experienced such a lapse in your coverage. Below is a list of auto insurance providers that offer fewer barriers and better rates to individuals who have had a lapse in their car insurance. Many of these companies are those that specialize in high-risk drivers.

  • State Farm offers high-risk driver auto insurance, but this is not its specialty.
  • SafeAuto specializes in high-risk drivers’ auto insurance.
  • Progressive began as a high-risk auto insurer.
  • Geico offers high-risk car insurance but does not specialize in it.
  • Acceptance specializes in high-risk car insurance.

How to deal with a car accident during a lapse

If your car insurance lapse grace period has expired and your auto insurance has fully lapsed, then there is no way for you to drive your vehicle legally. If you drive while uninsured, you open yourself up to a lot of potential costs and fees. Further, in the case of a car accident where you are at fault, you’ll have to pay out of pocket for any damages and injuries caused.

When you have a car accident while uninsured, a few bad things are going to happen. Your driver’s license will likely be revoked. You will receive tickets and fines and possibly jail time. Your vehicle registration may be suspended, and the police might impound your car.

All these consequences will go into your record, where any future car insurance company can see them. As a result, getting back on your car insurance will become even more difficult than it was already.

The takeaway

  • Letting your car insurance lapse can be costly.
  • There are ways to keep your insurance from lapsing.
  • Driving without insurance is illegal and expensive.
  • Insurance history calculates into your auto insurance premiums.
  • Some insurance companies specialize in high-risk drivers.

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 down the road and make driving your vehicle illegal. To avoid such lapses, make sure to 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. Until you’ve spent enough time with consistent coverage—anywhere from one to five years—these higher premiums will be hard to avoid.

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