What Happens If Your Car Insurance Lapses

In many situations, we’re comfortable letting things go. Maybe the kitchen garbage isn’t taken out right away. Sometimes our dirty laundry spills over the top of the hamper. Most of the time, little harm comes from such lapses. But if you're considering letting your car insurance go, there are several things to consider. Here’s what happens if you let your car insurance lapse: consequences.

1. You may lose money.

Some people allow their car insurance to lapse because they cannot afford it. However, the penalties associated with lapsed coverage can cost exponentially more than car insurance premiums.

There’s no “getting off with a warning” if you’re pulled over without car insurance. The first time it happens, you’re looking at a fine of anywhere from $100 to $2,000 (the upper end of the first-offense range in Delaware).

In the unfortunate event that you’re involved in an accident while driving with lapsed car insurance, not only will you be liable for your car and other vehicles/property involved in the accident, but your next insurance rates could also be double what they were before.

2. You could lose your license.

In some cases, a lapse in car insurance coverage could lead to you losing your license. Not having a driver’s license can pile onto the financial consequences of not having car insurance. That’s because unless you’re in the 55% of the U.S. population with access to public transit, getting to a job without the license necessary to drive a car is difficult.

That financial hardship only gets worse in places like Oklahoma. There, you’ll have to pay “statutory fees” of up to $350 to restore a license that’s been suspended due to driving without current car insurance.

3. You could lose your freedom.

Losing your driver's license can mean losing the freedom of transportation. Remember being a teen without a license? Imagine going back to that, minus the awkward puberty. How will you get to the grocery store? How will you get to work?

Additionally, in some states, your license won’t be the only thing that gets taken away if you get caught without car insurance—your car could be impounded, too!

If you already have a lapsed car insurance policy offense (or two) on your driving record and you get pulled over again, your literal freedom might be at stake! In states including Massachusetts, Minnesota, and West Virginia, to name a few,  subsequent offenses can sometimes carry penalties to one year in jail

What To Do If Your Car Insurance Lapses

Fortunately, you still have options if you find yourself in a situation with lapsed car insurance coverage. There are ways to address the situation promptly once any car insurance lapse grace period ends. (Grace periods vary but they can range anywhere from 3-30 days.)

  • Stop driving. Whether you just discovered your lapsed coverage, have been cited for it by a law enforcement officer already, or are hoping for the best while driving with lapsed coverage, stop!
  • Arrange for alternate transportation until you can legally drive again. Friends, family, and public transportation are good places to start!
  • Check if you can be listed as a driver on someone else’s policy temporarily. This is generally possible if you live at the same address as the person who holds the policy in question. Their insurance agent will be able to help.
  • Contact your insurance agent and walk through what steps are required to get re-insured. If cost was a factor before, get a car insurance quote from other companies before you go back to your prior insurance provider. Make sure to go with a coverage level and rate you can handle, since that’s one of the best ways to keep your insurance from lapsing again. 
  • Identify what steps your state requires—including fees or penalties assessed—to reinstate your license. Providing proof of insurance will almost certainly be the first step, so have that handy.

Our Support Never Lapses

Ignoring a lapsed car insurance policy can have financial and personal consequences. Are you at risk? Call, click, or come into a Direct Auto Insurance location near you to get affordable car insurance in your state.

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