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UPDATED: Mar 3, 2020
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Everyone seems to always be on the go, and life can get messy and crazy rather quickly. Bills are paid late, and sometimes not at all. But what happens if your insurance payment is late?
Do you still have coverage? Is there a grace period? We’re going to answer those questions and a lot more.
Need insurance now? You can enter your ZIP code in our free comparison tool and start getting quotes for cheaper car insurance today.
Lapsed car insurance policy—Is it illegal?
So you forgot to pay your car insurance premium. Is it illegal to drive around without insurance? In most states, the answer is yes. Not only are you liable for the damage done to your own car if you have an accident, but you are liable for the damage done to someone else’s car as well.
The risk of driving without insurance is simple—it’s just not worth it.
If you think your insurance has lapsed or canceled, you should immediately contact your insurance provider. If you’re wondering what it means to have lapsed insurance coverage, don’t worry. We will explain.
Is it illegal to not have car insurance?
There are very rare instances in which a driver does not legally have to have an insurance policy in force. New Hampshire is the only state with no insurance requirements or fees. The state of Virginia does not require insurance, but you must register your uninsured car and pay a hefty fine.
All states have minimum limits—even New Hampshire—if you decide to purchase an insurance policy. These limits are the minimum required amount, and you can opt to purchase more coverage. We suggest you purchase higher limits of insurance, especially if you own a luxury vehicle.
What does a lapse in your car insurance mean?
Maybe you’re reading this article and you’re unsure of what a lapsed car insurance policy means.
The following description is listed on The Economic Times website:
“Excessive delay in payments and servicing of the policy leads to the policy being dead or lapsed. However, a lapsed policy may be revived by fulfilling the terms and conditions as per the policy statement. To avoid losses to all parties, generally the revival and reinstatement is encouraged and facilitated.”
A lapsed insurance policy is simply a policy that was in force and due to the non-payment of premium, the policy has gone into canceled status.
What happens if your car insurance is canceled?
If your insurance is canceled, you should immediately contact your insurance provider and see if there is a grace period. We will cover more below on getting new insurance once your policy has lapsed or canceled.
The cost of not having insurance is high. There are not only fines and fees associated with not having insurance, but you can also lose your license and end up in jail.
Let’s take a look at the state laws and the consequences of being found guilty of driving without insurance.
State Laws for Car Insurance
Each state has its own unique set of laws regarding the legality of car insurance. Some may require a $15,000 limit for liability, while others require $30,000 of liability.
Your state laws decide how much insurance you must have and who pays if you get into an accident.
What states do not require car insurance?
Each state has its own set of required liability limits. Even if you chose to buy insurance in New Hampshire, which doesn’t require all drivers to purchase insurance, you still have a minimum amount you are required to buy.
Take a look at the below table and check out your state. How much insurance do you need to buy?
|Alabama||BI & PD liability||25/50/25|
|Alaska||BI & PD liability||50/100/25|
|Arizona||BI & PD liability||25/50/15|
|Arkansas||BI & PD liability, PIP||25/50/25|
|California||BI & PD liability||15/30/5|
|Colorado||BI & PD liability||25/50/15|
|Connecticut||BI & PD liability, UM, UIM||25/50/25|
|Delaware||BI & PD liability, PIP||25/50/10|
|D.C.||BI & PD liability, UM||25/50/10|
|Florida||PD liability, PIP||10/20/10|
|Georgia||BI & PD liability||25/50/25|
|Hawaii||BI & PD liability, PIP||20/40/10|
|Idaho||BI & PD liability||25/50/15|
|Illinois||BI & PD liability, UM, UIM||25/50/20|
|Indiana||BI & PD liability||25/50/25|
|Iowa||BI & PD liability||20/40/15|
|Kansas||BI & PD liability, PIP||25/50/25|
|Kentucky||BI & PD liability, PIP, UM, UIM||25/50/25|
|Louisiana||BI & PD liability||15/30/25|
|Maine||BI & PD liability, UM, UIM, Medpay||50/100/25|
|Maryland||BI & PD Liability, PIP, UM, UIM||30/60/15|
|Massachusetts||BI & PD liability, PIP||20/40/5|
|Michigan||BI & PD liability, PIP||20/40/10|
|Minnesota||BI & PD liability, PIP, UM, UIM||30/60/10|
|Mississippi||BI & PD liability||25/50/25|
|Missouri||BI & PD liability, UM||25/50/25|
|Montana||BI & PD liability||25/50/20|
|Nebraska||BI & PD liability, UM, UIM||25/50/25|
|Nevada||BI & PD liability||25/50/20|
|New Hampshire||FR only||25/50/25|
|New Jersey||BI & PD liability, PIP, UM, UIM||15/30/5|
|New Mexico||BI & PD liability||25/50/10|
|New York||BI & PD liability, PIP, UM, UIM||25/50/10|
|North Carolina||BI & PD liability, UM, UIM||30/60/25|
|North Dakota||BI & PD liability, PIP, UM, UIM||25/50/25|
|Ohio||BI & PD liability||25/50/25|
|Oklahoma||BI & PD liability||25/50/25|
|Oregon||BI & PD liability, PIP, UM, UIM||25/50/20|
|Pennsylvania||BI & PD liability, PIP||15/30/5|
|Rhode Island||BI & PD liability||25/50/25|
|South Carolina||BI & PD liability, UM||25/50/25|
|South Dakota||BI & PD liability, UM, UIM||25/50/25|
|Tennessee||BI & PD liability||25/50/15|
|Texas||BI & PD liability, PIP||30/60/25|
|Utah||BI & PD liability, PIP||25/65/15|
|Vermont||BI & PD liability, UM, UIM||25/50/10|
|Virginia||BI & PD liability, UM, UIM||25/50/20|
|Washington||BI & PD liability||25/50/10|
|West Virginia||BI & PD liability, UM, UIM||25/50/25|
|Wisconsin||BI & PD liability, UM, Medpay||25/50/10|
|Wyoming||BI & PD liability||25/50/20|
Unfortunately, not all drivers follow the law. Where does your state land on the list for uninsured drivers?
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What are the consequences of driving without car insurance?
The consequences of driving without insurance depend on the state you live in. Driving without insurance is not worth it.
Consequences range from fees and fines from various entities to jail time.
The Department of Motor Vehicles charges fees to drivers who drive without insurance.
|State||DMV Fees for Lapsed Insurance|
|Alabama||Registration reinstatement fee of $200 on first offense and $400 on second offense|
|Alaska||License reinstatement fee of $100 for first lapse or $250 if combined with another non-DUI related offense|
|Arizona||License reinstatement fee of $50|
|Arkansas||License reinstatement fee of $50|
|California||License reinstatement fee of $14|
|Colorado||Reinstatement fee of $40|
|Connecticut||Reinstatement fee of $200|
|Delaware||DMV lapse fee of $100 per vehicle and $5 per day after first 30 days|
|District of Columbia||DMV lapse fee of $150 and $7 per day after first 30 days to a maximum of $2,500|
|Florida||Registration and license reinstatement fee of $150 for first lapse, $250 for second reinstatement, $500 for third or more within three years|
|Georgia||Lapse of more than 10 days incurs a $25 fee if not paid within 30 days along with a $60 reinstatement fee|
|Hawaii||License reinstatement fee of $20 in Honolulu County; other counties may differ|
|Idaho||License reinstatement fee of $85|
|Illinois||Reinstatement fee of $100|
|Indiana||Reinstatement fee $150 for the first offense, $225 for a a second offense, or $300 for a third offense|
|Iowa||Need to show proof of financial responsibility only after an accident, at which time at least $485 in penalties and fees incurred|
|Kansas||Reinstatement fee $100 for first offense, $300 for second offense within one year|
|Kentucky||registration reinstatement fee of $40|
|Louisiana||DMV lapse fee of $125 for up to 30 days, $225 for 31 to 90 days, $525 for over 90 days|
|Maine||License reinstatement fee of $50, plus $20 to $30 additional fee and $35 registration reinstatement fee|
|Maryland||Uninsured motorist penalty fee of $150 for the first 30 days, $7 for each day thereafter, and registration restoration fee of up to $25|
|Massachusetts||Reinstatement fee of $500|
|Michigan||Registration reinstatement fee of $50 plus $25 if license was suspended|
|Minnesota||License and registration reinstatement fee of $30|
|Mississippi||License reinstatement fee of $30|
|Missouri||License reinstatement fee of $20 after first suspension, $200 after second suspension, $400 after third suspension|
|Montana||No charge for first lapse of insurance|
|Nebraska||Reinstatement fee of $500|
|Nevada||Reinstatement fee of $251 plus a fine of $250 if lapse was 31 to 90 days, $500 if lapse was 91 to 180 days, and $1,000 if lapse was more than 181 days|
|New Hampshire||Only proof of financial responsibility is required|
|New Jersey||Restoration fee of $100|
|New Mexico||Registration reinstatement fee of $30|
|New York||Civil penalty of $8 per day for lapses of insurance for the first 30 days, $10 per day for the second 30 days, and $12 per day for the third 30 days|
|North Carolina||Civil penalty of $50 for the first insurance lapse in a three-year period, $100 for the second lapse, $150 for third and subsequent lapses|
|North Dakota||No loss of license or registration on first offense|
|Ohio||Compliance fees up to $60, plus reinstatement fee of $100 for first offense, $300 for second offense, $600 for third offense|
|Oklahoma||Reinstatement fee of $275, plus $125 administrative fee|
|Oregon||License and registration reinstatement fee of $75|
|Pennsylvania||Restoration fee of $88|
|Rhode Island||Reinstatement fee of $30 to $50|
|South Carolina||DMV lapse fee of $5 per day up to $200, plus $550 uninsured motorist fee|
|South Dakota||License reinstatement fee of $50 to $200, depending on length of non-compliance, and $28 application fee|
|Tennessee||License and registration restoration fee of $65, plus $50 administrative fee|
|Texas||Reinstatement fee of $100|
|Utah||Reinstatement fee of $100|
|Vermont||Driver’s license reinstatement fee of $71|
|Virginia||Registration reinstatement fee of $145|
|Washington||Reinstatement fee of $75|
|West Virginia||Registration reinstatement fee of $100|
|Wisconsin||License reinstatement fee of $60|
|Wyoming||Reinstatement fee of $50|
Reinstatement fees can range from a daily charge to a one-time fee of $500.
Multiple driving without insurance charges can even land you in jail. Idaho, Kentucky, and Michigan are just three of the many states that will impose jail time for driving without insurance.
Chances are if you are breaking the law by driving without insurance, you won’t be leaving in a car with no insurance. So go ahead and add more fees to your total for impound and re-registration.
Not only do you have to pay fees to the DMV, but the state also has fines.
Fines can range from $25 all the way up to $5,000.
SR-22 is a filing required in some states for drivers convicted of driving without insurance or even other charges such as reckless driving or driving under the influence.
Your insurance company files proof with the state that shows that you at least have the minimum required insurance limits set by the state. This is not insurance, but merely a filing from your insurance company.
Importance of Maintaining Continuous Car Insurance Coverage
Maintaining continuous coverage is important for many reasons. Once you have let your car insurance lapse or cancel, fees and fines begin to pile up. Once you become insured after a lapse, your car insurance rates could increase drastically. You could lose your car, license, and even worse, be in financial ruin due to this decision.
What should you do if you’re charged with driving without car insurance?
Mistakes happen. You thought you paid your insurance bill or maybe you didn’t know your insurance was canceled. What do you do next? First, you need to get insurance for your car. If you got a ticket, you should also follow all protocols listed on your citation.
Depending on your state laws and driving history, you could arrange a plea bargain or get your charges reduced. This all depends on your state and the judge you are set to see on your court date.
Does unpaid car insurance go on your credit?
This is a tricky question. If you’re late in paying your insurance, the answer is no, it does not go on your credit. If you have earned premium, which is due despite canceling your coverage, and you don’t pay, then the answer is yes.
Earned premium is an amount due even after you have canceled your coverage. This amount must be paid to the insurance company. If not, the insurance company has the right to turn you into collections, which can definitely affect your credit.
Accidents and claims with no car insurance
So what should you do if you’re involved in an accident with no insurance or hit by someone with no insurance? Let’s take a look at your options.
What should you do if you were involved in an accident with an uninsured motorist?
Accidents are stressful enough, but knowing you are fully insured makes the process a little bit easier. Whenever you are involved in an accident, there is a chance the other person involved does not have insurance. So what do you do if that happens?
If you have coverage, you will file the claim against your insurance under uninsured motorists coverage. This coverage can be used to pay for medical bills and property damage incurred by someone without insurance.
What happens if you get into a car accident without insurance?
What if you are the one without insurance? Well, depending on your state, you could be named in a lawsuit and a judgment filed against you.
If you live in a no-fault state, the other party not at fault is still required to file the claim on their insurance.
In rare cases, the party not at fault can file a lawsuit, but it is not as likely in no-fault states.
If you live in one of the many tort states, or at-fault, you could be held liable for pain and suffering along with medical bills and property damage.
Getting car insurance after a lapse or cancellation
Once you realize you don’t have insurance, the next thing you must do is get insurance. But how do you get it? We’ll explain how you can get new coverage or possibly continue with your previous coverage.
Is there a grace period for late car insurance payments?
Some companies offer a grace period for late payments. The best thing to do is always pay your insurance payment when it’s due, but often companies will allow a period of time when you can make a payment after the due date.
Companies can range from just a few days to a few weeks. We suggest calling as soon as you realize you haven’t made your current payment and see how to rectify the payment and continue coverage.
Remember, companies don’t have to provide coverage if you were to get into an accident and were late on your payment.
They can also add fees when you’re late. Don’t rely on grace periods.
While some companies may reinstate your policy due to a grace period, others may rewrite your policy. The new policy could have higher rates due to lapsed coverage, and they may even impose financial restrictions such as only paying with automatic transfer.
Does letting your car insurance cancel affect your rates in the future?
Most insurance companies ask about your prior coverage and if you have had continuous coverage. Not having coverage for an extended period of time can categorize you as a high-risk driver. This will increase rates. Some companies do not offer insurance rates to drivers without continuous coverage.
Cheapest Car Insurance Rates for Lapsed Drivers
The best option to get the cheapest lapsed driver car insurance is to shop around. It may be a longer process, but shopping your insurance with various companies will ensure you are getting the best rates available.
The Bottom Line
Unless you live in New Hampshire, driving without insurance is against the law. Even if you live in New Hampshire, the state still requires minimum limits if you chose to buy a policy. Driving without insurance can cause many consequences from exorbitant fees to even jail. It’s not worth the potential money saved by not paying your premium.
If your coverage has lapsed or you are looking for cheaper coverage, enter your ZIP code here to get fast, free rates for coverage in your area.
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