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How to reinstate canceled auto insurance

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Forgetting to pay a car insurance payment is not uncommon. Usually, there is no great harm done if this is a rare occasion and you pay as soon as you realize it’s late. But what happens if you’re in a financial crisis and are unable to pay your auto insurance premiums, and you lose coverage? 

In this case, your best bet is to try to reinstate your policy with the same company. This is easier than searching for a whole new company to carry your policy and has other benefits that we’ll discuss in this article. Let’s take a look at what’s involved in reinstating canceled auto insurance.

What is car insurance reinstatement

Car insurance reinstatement means that you’ve had a policy canceled, most likely for non-payment of your premium, and you have chosen to reestablish that policy. Most insurers give you a grace period for payments after your scheduled due date—usually around 30 days — but after that, they are likely to cancel your policy.

A reinstatement can be accomplished by paying what you owe, either before or after the policy has been cancelled, along with any fees incurred for your late payment. Also, reinstatement can only take place with the same company and policy you had before — you can’t be reinstated with a similar policy from another company.

When your policy is reinstated, you may be able to keep your same policy number and premium cost, but there will likely be fees involved — this varies from company to company and by state. Typically there is a reinstatement fee, and it’s possible that your rates will go up, though not a given.

Can you reinstate a car insurance policy?

If you’re asking yourself “how do I get my insurance reinstated?” the answer is: it depends. Reinstating your policy depends on several factors, including the length of time that’s passed since your payment was late, whether you’ve had a lapsed policy in the past, and who is your insurance provider. Every company has its own rules about reinstating policyholders after non-payment.

Reinstating your policy is worth considering because it’s often easier than starting the process of getting an auto insurance policy from the beginning. With reinstatement, you are already familiar with your policy, provider, and premium. This means you save time not having to compare providers or shop around for a good fit. 

There are two types of situations that you may find yourself in when your policy you’re trying to be reinstated: your coverage is either lapsed, or non-lapsed.

Lapsed vs Non-Lapsed

If your coverage has lapsed, then you have passed the grace period and your policy is no longer active. If this is the case, you should not be driving as you are no longer protected by insurance. Non-lapsed coverage happens during the grace period — after your payment is due, but while your coverage is still active.


A reinstatement from lapsed coverage is the more serious condition of the two. It means that there has been a period of time in which you were not covered by an auto insurance policy because the company has canceled your coverage. If you’ve been driving for this period, you’ve probably been doing so illegally.

It is sometimes possible to be reinstated from lapsed coverage depending on your insurer’s policies and rules. You will be required to pay up front whatever you owe from your unpaid premium for a start. There may also be a reinstatement fee, and your rates may be affected by an increase.

You will also have to sign a no-loss statement indicating that you will not file a claim of any kind for the lapsed period. Plus, the lapsed coverage will show on your insurance record, and your company may re-assign you to a higher risk pool. This may cause problems if you have a car loan, as your lienholder typically requires you to have continuous coverage as a condition of the loan. Lapsed coverage often triggers penalties or fees from involved parties.


Non-lapsed coverage is a little easier to mitigate. Let’s say you miss a payment and you receive notification from your insurer, as it is required to do by law, indicating that you are now in the grace period. If you pay your premium during this period, along with any interest fees the company assesses, you can recover your good standing with the company without any lapse in coverage.

This means you are able to drive legally, even if your payment is late. The important thing is to contact your insurance company as quickly as you can after the due date to explain circumstances and make your payment. You may be required to file a no-loss statement and pay a reinstatement fee, but your policy will continue with no lapse.

During the coronavirus pandemic, some insurers have been extending the grace period to allow those who have had income disruptions to catch up. But in order to know if your company has done so, you’ll need to talk to your agent or check out the company’s website.

How to contact your insurance company

If you have a good relationship with your insurance agent, you may be able to handle your reinstatement with a quick phone call. If you purchased your policy online, the first thing to do is to look at the “Contact Us” link on the company’s website to see their preferred contact methods. It’s good to connect with a live person, either via phone, chat, or email, so that you can ask any questions and ensure that you’ve given the company everything it needs to reinstate your policy.

When talking to the agent, have handy your policy number, the date of your last payment, when the missed payment was due, and your notice of policy cancellation if applicable. It’s also a good idea to have your policy document in front of you, as well as your vehicle information.

How many times can car insurance be reinstated

Policy reinstatement should be a rare event, if it happens at all. Insurance providers may be lenient with a one-time occurrence, since many people have an issue once in a while with payments due to a lost the bill perhaps, or because a family crisis interrupted regular payments.

But if you apply to be reinstated more than once every three years or so, you run the risk that the company will turn you down, or increase your rates significantly. In that case, you may be better off making a fresh start at a new company.

Tips to help reinstate your car insurance

  • Begin the process of reinstating your policy as soon as possible — the sooner you address the issue, the easier it will be to get reinstated.
  • Do all your insurance business with one company. If you have bundled your auto insurance with homeowners or renters, your company has a greater interest in keeping you as a customer.
  • Establish a pattern of paying on time, well before the due date, to retain good standing with your insurer.
  • Find a way to make a full payment, rather than trying to negotiate a partial one — your insurer is unlikely to cut you any slack if you are in or past the grace period.
  • If your insurer won’t reinstate your policy, your best bet is to cancel that policy and move to a new company.

The takeaway

Reinstating your auto insurance is possible, but it’s easiest if the policy hasn’t lapsed.

  • Your policy has a grace period that’s mandated by state law in which you have time to pay your bill without a lapse in coverage.
  • If you can make the missing payment before that grace period is over, you stand a good chance of reinstatement.
  • You may have to sign a no-loss statement denying any claims during the grace period or after.
  • Reinstating your policy after the grace period is over is harder, and may cost you in late fees and premium increases.

If you have missed a payment on your auto insurance, it’s worth your time to try to have it reinstated. Non-lapsed reinstatement means there is no period in which you’re not covered. Lapsed reinstatement is more challenging as it means you’ve passed the grace period and are without coverage; it also leaves you with a negative mark on your insurance record.

Either type of reinstatement may require you to sign a no-loss statement, can cost you in interest fees, late payment fees and potentially increased rates in the future. Your insurer may place you in a higher risk category, especially if you’ve tried to be reinstated after a lapse, or more than once.

Mary Van Keuren

After 30 years as a writer and editor in academia, Mary now writes full-time for the insurance and finance industries. Her work has appeared on Reviews.com, TheSimpleDollar.com and Bankrate.com, as well as other consumer-focused websites.

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