What happens when your insurance coverage lapses?
A lapse in coverage may cause insurance companies to see you as a high-risk driver, even if you have a good driving record. It can also potentially impact your future car insurance premiums. It’s best to keep continuous coverage to get the best insurance rate and make sure that you’re protected in a car accident.
How bad is a lapse in insurance?
You should avoid a lapse at all costs, no matter how short it is. You are at great risk if you are in an accident while you have no coverage. You may also incur fines or other penalties, such as the suspension of your driver’s license or increased expenses from your lienholder if your insurance coverage lapses.
What is a lapsed auto insurance policy?
A lapse in car insurance is any period in which you have a registered car, but do not have car insurance. A lapse can be as short as one day — if there’s any period you’re without car insurance, that counts as a lapse. However, some insurers may not penalize you for a short lapse of under two weeks.
How much is a insurance lapse fee?
What happens if your car insurance lapses?
| State | DMV/RMV Insurance Lapse Fees |
|---|---|
| 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 |
Does a lapse in insurance affect credit?
The short answer is no. There is no direct affect between car insurance and your credit, paying your insurance bill late or not at all could lead to debt collection reports. Debt collection reports do appear on your credit report (often for 7-10 years) and can be read by future lenders.
How long can I go without car insurance?
So, how long can you be without car insurance? If you’re driving, you can’t. Anytime you get behind the wheel as a licensed driver, you need insurance coverage or you’ll risk incurring major consequences.
What causes car insurance lapse?
There are a few common ways you can lapse in coverage: Your policy is canceled by your insurer. You do not reinstate or renew your policy. You switch insurance companies and your new policy does not start on the same day that your previous policy ended, so you go uninsured for a few days, weeks, or months.
What happens if you default on car insurance?
If you don’t pay your insurance premiums, your policy will lapse, and you won’t have coverage. That means that, depending on where you live, it might be illegal to continue driving your car. Doing so anyways could mean pricey fines and even license suspension, depending on your state.