What to Do if Car Insurance is Canceled for Nonpayment
Call your car insurance company if you can't pay your bill. You might be able to make your payment in the next 10 days or so to keep your policy.
If you miss paying during the grace period, your policy could be canceled, and you wouldn't be allowed to drive your car. Your next step would be asking for the policy to be reinstated or finding a new policy from another company.
What to do if:
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You can't afford your next payment: Ask the company about your options.
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You missed a payment: Pay a late fee if you are still in grace period (typically up to 30 days).
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Your car insurance was canceled: Get a new policy from a company for high-risk drivers.
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What should I do if my car insurance is canceled because I missed a payment?
If you miss a car insurance payment, you'll get a legally required notice of cancellation from your insurer. This notice may come in the mail or by phone call or email.
You'll usually have 10 to 20 days between the date of the cancellation notice and the date you are no longer covered. The exact amount of time differs by state.
After that, your insurance will officially lapse and you'll no longer be able to drive your car legally. In some states, letting your insurance lapse also voids your registration — either right away or a few weeks after your insurance lapses.
What to do next if your car insurance was canceled
If your insurance bill went unpaid long enough for your coverage to be canceled, you'll have to apply for a new policy. Start by calling your current insurance company.
It's illegal to drive without insurance in nearly every state, so once your insurance is canceled, you won't be able to drive until you get a new policy.
After you have insurance again, you should contact your state's department of motor vehicles (DMV) to update your insurance info and confirm that your registration and driver's license are still valid. You should also make sure you don't owe your old car insurance company money. It may eventually pass any overdue debts to a collection agency.
How do I find a new policy after a cancellation?
If your previous company will not offer you insurance at all, you'll need to go with another company, such as a nonstandard insurer.
Besides facing higher rates, it's also possible that it will be more challenging to find insurance if you've let your policy lapse. Letting your policy lapse is one sign to insurers that you're a high-risk driver.
If you're having trouble finding coverage after a lapse from a standard insurer, you may have better luck at a company that specializes in high-risk drivers, such as The General or SafeAuto. But expect worse rates and service at this type of company.
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How can I afford a new car insurance policy?
Unfortunately, your rates will likely increase, as car insurance companies charge more for drivers who have had their insurance canceled due to missed payments.
The longer you go without coverage, the bigger the price increase will be when you get a new policy. A 15-day lapse could result in an 8% lapse, while a 45-day lapse could result in a 24% jump.
Will I need to pay a fee if my insurance is canceled from missing a payment?
If your car insurance lapses or is canceled, whether it's because of nonpayment or any other reason, you will likely face financial consequences even after you have reinstated your insurance.
- Pay fees at the DMV: Some states will charge you for even a brief lapse in insurance coverage. For example, in New York, drivers have to pay $8 per day for up to 30 days during which their insurance was lapsed, with increased penalties thereafter.
- Suspended car registration or driver's license: Nearly every state requires drivers to insure their cars in order to register them, and many states require insurance companies to notify them if drivers let their insurance lapse. This could result in the automatic suspension of your car's registration or your driving privileges, leaving you unable to legally drive.
- SR-22 insurance: You might be required to get an SR-22 if you're caught driving while uninsured, especially if you cause an accident.
- Expensive car insurance rates: Insurance companies like to see that drivers can reliably pay their bills on time every month. People who let their coverage lapse, even for a short amount of time, will likely see an increase in car insurance prices the next time they renew.
- Repossessed loaned/leased car: Most car lenders require you to have full insurance coverage on the vehicle as long as the vehicle is financed. If your car lender finds out you are not carrying insurance on the vehicle, it may repossess the car.
- Lower credit score: If you owe money on your car insurance and your insurer passes the debt to a collection agency, it will likely impact your credit score. This can affect your ability to get a credit card or loan, and the black mark will stay on your credit report for up to seven years.
What to do before you miss a car insurance payment
As soon as you realize you will likely miss or have already missed a car insurance payment, call your insurance company to let them know you're aware of the situation and ask what you can do next. The options available will depend on how long you've gone without paying your car insurance bill, your insurance company's policies and your state laws.
But no matter the details of your situation, it's key that you communicate with your insurance company to figure out an arrangement. Ignoring or delaying the issue will only make your problems worse.
If the payment is not yet due
If your auto insurance payment is not yet due, or it hasn't been processed but you know you won't be able to afford it, you may be able to postpone payment or extend the due date temporarily while you come up with the money. Depending on your insurer, you may not even have to call an agent to do so. For example, Geico allows customers to delay autopay bills by up to nine days through the company's mobile app.
The agent you're working with may have some discretion about how much leeway to give you, especially if you have a credible reason why you won't be able to make the payment. They may also be able to arrange a partial payment to keep you insured if your insurance company allows it.
If you've missed a payment by a few days
If you've only missed the payment by a few days to a week, you likely can reinstate your policy without a lapse in coverage or other serious consequences, as you're still in the grace period. You'll have to pay the amount you missed, usually with a late payment fee. Make sure to do so promptly, though, as the grace period may vary.
Frequently Asked Questions
What happens if I pay my car insurance late?
If you pay your car insurance a couple of days late, you will most likely still be in the grace period. However, you will probably be charged a late payment fee. If your payment is later than the grace period allows, your insurance can lapse.
How long is the grace period before your insurance policy lapses?
The grace period for late payments before your policy lapses varies by insurer and by state. The grace period is typically anywhere between one and 30 days. It is very important to know the grace period for your policy and to contact your insurer if you expect to make a late payment.
How can you reinstate canceled auto insurance?
When your auto insurance is canceled, the first thing you should do is call your current insurer. If your policy has only lapsed for a couple days, it’s possible they can reinstate it. If your insurer requires you to get a new policy, you should shop around to search for the best rate.
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