How Much Does a Lapse in Coverage Affect Insurance Rates?

You might think that you don’t need to have insurance if you don’t drive regularly, but that’s not necessarily the case. Even if your car is parked in the driveway for the foreseeable future, there can still be consequences if you let your insurance lapse.

Not only is owning an uninsured vehicle illegal in most states, but even a small lapse in coverage can increase your insurance rates dramatically. To avoid having to pay more for insurance and being penalized by the Registry of Motor Vehicles, you’ll have to purchase car insurance, regardless of how often you drive.

• What Happens If Your Car Insurance Lapses?
• What Qualifies as a Lapse in Insurance?
• Cheapest Auto Insurance Companies After a Lapse
• Getting Car Insurance After a Lapse
• How to Avoid a Lapse in Insurance
• Frequently Asked Questions

Most drivers know their insurance rates will increase if they get into an accident or need SR-22 coverage. Lapses in coverage can also increase your premiums since car insurance companies will view you as a riskier driver.

Your car insurance costs will go up if you have a lapse in coverage, though the exact amount can vary depending on your particular situation. Rates increase by $167 per year after a lapse of fewer than 31 days and $277 for a lapse of over 31 days, on average.

While the exact penalties vary by state, most states charge hefty fines for a lapse in insurance coverage.

For example, you may have to pay a reinstatement fee of up to $500 in states like Massachusetts and Nebraska. There are a few states that don’t charge a penalty for the first lapse in coverage, including Montana and North Dakota. New Hampshire doesn’t charge any penalty for a lapse in coverage as long as drivers show proof of financial responsibility.

A shorter lapse in car insurance (typically under a month) will only result in a moderate rate increase. In contrast, a lapse of over a month will result in much higher premiums. While you should always strive for continuous coverage where possible, try to keep any lapses in insurance coverage under a month if possible.

After a lapse in coverage, the cheapest auto insurance available to you will depend on many factors, including your location, age and driving record.

However, on average, USAA and GEICO provide the cheapest rates for drivers before and after a lapse in coverage. USAA’s auto premiums increase by an average of just $24 for lapses under 31 days and $50 for lapses of 31 days or more. GEICO’s rates increase by an average of $80 and $107, respectively.

In contrast, Allstate has some of the highest rate increases, charging an average of $647 more for lapses under 31 days and $714 more for lapses of 31 days or more.

If you have a lapse in insurance coverage, you can still purchase car insurance coverage for your vehicle. While your rates might be higher, we recommend you buy as much insurance coverage as you can comfortably afford to protect both yourself and your vehicle.

When looking for car insurance after a lapse in coverage, be sure to shop around and compare rates. Car insurance companies penalize a lapse in coverage to differing degrees. By getting quotes from several different insurers, you can make sure that you’re getting the best possible deal.

Additionally, ask your insurance provider if they offer no down payment car insurance. This way, you can get insured with the lowest available upfront payment.