Cars and Trucks

What Is the Cheapest Auto Insurance for Lapse in Coverage?

Double_VisionGetty Images

The cheapest auto insurance for lapse in coverage is available from a wide range of insurers. Many insurance companies can raise your premiums for a lapse in auto insurance, especially if it extends for more than two weeks. This makes it important to know where you can get affordable auto insurance premiums when you have a lapse in coverage.

What Is a Lapse in Car Insurance?

A lapse in car insurance occurs when your registered car does not have valid auto insurance for 30 to 60 days.

What Can Cause a Lapse in Car Insurance?

Situations providers consider to be lapses in car insurance, according to ValuePenguin, include:

If you forget to renew your policy or missed a payment

Forgetting to renew your policy after its expiration or missing a monthly payment can cause your provider to cancel your policy, resulting in a lapse of insurance. When your policy becomes inactive, your auto insurance provider can send a notice to your state’s DMV of your uninsured status.

States have different rules for lapse of insurance, but many require you to pay a fine and might also apply other penalties. Your insurance premiums will also continue to rise during the period your policy was not in effect.

Moving/studying abroad or deployed overseas

Moving abroad to live or study or getting deployed overseas for military service can also lead to a lapse in insurance, because you aren’t driving your car while away. Some insurance companies, such as GEICO, USAA, and Esurance, allow military members to suspend auto insurance in their absence.

A suspended insurance is not the same as a lapse, making it an effective strategy for keeping your rates low. If you need to move abroad, your state’s DMV must issue an affidavit to cover the period you will not be using the vehicle.

Policy Cancellation

Your insurance policy will lapse automatically if you cancel it or remove yourself from a policy that covers several drivers.

Do Insurers Allow Drivers to Suspend or Pause Car Insurance?

It is possible to suspend or pause your car insurance, but not every insurer allows it. For example, you might not qualify for a car insurance suspension if you leased your car or bought it with a loan. If you can’t suspend the policy, you can either cancel your insurance or remove yourself from a multi-driver policy. However, this constitutes a lapse and increases the chances your insurer will raise your rates. You can complete an exemption form from your state’s DMV to avoid penalties.

What Is the Effect of Having a Lapse in Coverage?

According to The Zebra, letting your car insurance lapse can lead to consequences such as:

  • A hike in your insurance rates
  • Suspension of your driver’s license
  • State DMV penalties
  • Lack of coverage if you have an accident

    Insurers raise the rates of drivers with lapsed policies because they consider them to be higher risk. To the insurer, allowing your insurance to lapse means either you can’t maintain your coverage or you’ve decided to drive without insurance.

    Is There a Grace Period After a Car Insurance Coverage Lapse?

    The grace period after your insurance lapses depends on your insurer, says The Zebra. Your auto insurance provider might renew your policy after considering the amount of time you were uninsured and the reason for the lapse. For example, if your insurer canceled your policy because you missed a payment, it might not penalize you if you pay your premium quickly.

    Why Does Car Insurance Get Expensive After a Coverage Lapse?

    The major reason your car insurance premium rises after a coverage lapse is because your uninsured status increases the risk for the insurance company. When insurance companies find a period without coverage on your driving history, they consider you a higher risk compared to drivers with uninterrupted coverage.

    What Is the Average Six-Month Insurance Premium By Insurance History?

    The Zebra breaks down the average six-month, one-year, three-year, and five-year premiums by insurance history:

    Insurance history Average car insurance premium Difference vs. no insurance history
    None $876
    6 months State Minimum Bodily Injury Limit $845/$32
    6 months 50-100 Bodily Injury Limit $802/$73
    1 Year State Minimum Bodily Injury Limit $792/$83
    3 Years State Minimum Bodily Injury Limit $812/$63
    3 Years 50-100 Bodily Injury Limit $774/$101
    5 Years State Minimum Bodily Injury Limit $798/$77
    5 Years 50-100 Bodily Injury Limit $759/$116

    What Is the Effect of Carrying Longer Insurance?

    The effect of carrying longer insurance is that it reduces your insurance premiums over time. Drivers who carry car insurance for longer periods pose less risk to insurers, so they reward them with lower rates. Conversely, drivers with minimal coverage levels often file more insurance claims, which makes them higher-risk customers. To protect themselves, insurers charge these groups of drivers higher premiums.

    What Is the Average Six-Month Insurance Premium By Coverage Level?

    According to The Zebra, here are average six-month insurance premiums by coverage level:

    Insurance history Average car insurance premium Difference vs. no insurance history
    5 Years State Minimum Bodily Injury Limit $798/$77
    5 Years 50-100 Bodily Injury Limit $759/$116
    5 Years 100-300 Bodily Injury Limit $743/$132

    How Much Can You Save by Maintaining a Higher Level of Coverage?

    You can save up to $264 per year when you renew your insurance premium, says The Zebra, if you maintain higher levels of coverage for five years.

    Can You Reinstate an Insurance Policy to Avoid a Lapse in Coverage?

    Whether you can reinstate your coverage to avoid a lapse depends on your insurer’s regulations. It might be possible to reinstate your policy if it was canceled because of nonpayment. However, you might need to pay a reinstatement fee.

    In many cases, insurance companies will allow you to reinstate your policy if the lapse period is just a few days. When it becomes longer, you might need to pay a higher rate or find a new insurance provider.

    Check this out if you need additional information, resources, or guidance on car insurance.


    This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at

 Source link

Back to top button
SoundCloud To Mp3