In addition, if you’re caught driving without insurance, you could face an insurance lapse fine for up to $5,000, have your license suspended, or your car impounded. These expenses can really add up, and, if you can’t afford them upfront, they could be deducted from your future wages. If you cause a car accident or damage property while you’re not insured, you’ll be responsible for paying all of the expenses involved, including paying for the other party’s property and medical bills, your car, and your own medical bills. Check out all of Root’s coverage options.Īre there other consequences for an insurance lapse? Typically, the minimum required coverage for leased or financed cars is referred to as “full coverage.” This is made up of Liability (Bodily Injury and Property Damage), plus Collision and Comprehensive coverages. Check your loan terms before allowing your coverage to lapse. If your insurance lapses on a financed or leased car, your lien holder could repossess your car or purchase a new policy that you’ll have to pay at a much higher rate. Liability coverage is the minimum amount of coverage required to drive, but it only covers the injuries and property of others when you cause an accident.īecause Liability doesn’t cover your car, your lien holder (loan company) could require you to carry more than the state minimum. Essentially, the grace period is your final notice to avoid a policy lapse. If you don’t pay by the end of the grace period, your insurer could cancel your policy-leaving you uninsured and making it harder and often more expensive to get new coverage. Once you make your payment, you’ll remain on the same policy. Typically, you’ll have what’s called a grace period-often between 10 and 20 days, depending on your state-to make your payment without your policy being canceled. If you miss a payment or don’t renew your policy on time, you’ll receive a notice from your car insurance company before they drop your coverage. Find the right coverage amount for your needs and that you know you can afford. The lower the perceived risk to insure you, the more likely your insurance company will keep you as a customer. The Root app makes sure you have legal coverage that meets your state’s minimums.ĭrive safely. Liability is required in all states except New Hampshire. Consider setting up automatic payments through your insurer or bank.Ĭarry at least your state’s minimum insurance levels. In addition to keeping track of when your car insurance bills are due each month, keep an eye on when your policy will end, so you’re ready to renew. If possible, it’s best to avoid a coverage lapse in the first place. But remember, driving without insurance is illegal, unless you live in New Hampshire. Sometimes traveling abroad or not needing to drive for a time can be the reason someone ends up with a gap in their auto insurance coverage.Ī lapse in coverage usually means you need to reinstate with the company you were previously with, if possible, or find a new insurance company. An insurance lapse is a period of time when a registered car does not have the legal minimum amounts of car insurance coverage.Ī lapse can be due to cancellation from not paying your premiums, not renewing a policy when it ends, or from getting dropped by an insurance company after too many accidents or tickets.
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