What Happens if You Let Your Car Insurance Payments Lapse?

You need to keep your car insurance up to date. A lapse in coverage is illegal and leaves you uninsured if you have an accident.
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All states in the U.S. require you to carry a minimum amount of liability insurance. Sometimes, though, your coverage might lapse due to non-payment. Allowing your coverage to lapse can get you in trouble with the law, including tickets and fines, and even a suspension of your driver’s license if you are caught driving without insurance.
What exactly happens when your car insurance lapses due to non-payment? And what options do you have?

Part 1 of 3: Required coverage for driving in the U.S.

All states within the U.S. require you to have some way of paying for bodily injury or property damage if you cause a car accident, usually in the form of liability insurance. The following table from ValuePenguin details the liability coverage requirements of each state.
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<table class="tg"> <tr> <th class="tg-pxac" colspan="2">Liability Coverage Requirements by State</th> </tr> <tr> <td class="tg-amwm">State</td> <td class="tg-amwm">Body Injury Liability per Person/<br>Bodily Injury Liability per Accident/<br>Property Damage Coverage Requirements</td> </tr> <tr> <td class="tg-baqh">Alabama</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Alaska</td> <td class="tg-baqh">$50,000/100,000/25,000</td> </tr> <tr> <td class="tg-baqh">Arizona</td> <td class="tg-baqh">$15,000/30,000/10,000</td> </tr> <tr> <td class="tg-baqh">Arkansas</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">California</td> <td class="tg-baqh">$15,000/30,000/5,000</td> </tr> <tr> <td class="tg-baqh">Colorado</td> <td class="tg-baqh">$25,000/50,000/15,000</td> </tr> <tr> <td class="tg-baqh">Connecticut</td> <td class="tg-baqh">$20,000/40,000/10,000</td> </tr> <tr> <td class="tg-baqh">Delaware</td> <td class="tg-baqh">$15,000/30,000/10,000</td> </tr> <tr> <td class="tg-baqh">District of Columbia</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Florida</td> <td class="tg-baqh">$10,000/20,000/10,000</td> </tr> <tr> <td class="tg-baqh">Georgia</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Hawaii</td> <td class="tg-baqh">$20,000/40,000/10,000</td> </tr> <tr> <td class="tg-baqh">Idaho</td> <td class="tg-baqh">$25,000/50,000/15,000</td> </tr> <tr> <td class="tg-baqh">Illinois</td> <td class="tg-baqh">$20,000/40,000/15,000</td> </tr> <tr> <td class="tg-baqh">Indiana</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Iowa</td> <td class="tg-baqh">$20,000/40,000/15,000</td> </tr> <tr> <td class="tg-baqh">Kansas</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Kentucky</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Louisiana</td> <td class="tg-baqh">$15,000/30,000/25,000</td> </tr> <tr> <td class="tg-baqh">Maine</td> <td class="tg-baqh">$15,000/30,000/10,000</td> </tr> <tr> <td class="tg-baqh">Maryland</td> <td class="tg-baqh">$30,000/60,000/15,000</td> </tr> <tr> <td class="tg-baqh">Massachusetts</td> <td class="tg-baqh">$30,000/60,000/15,000</td> </tr> <tr> <td class="tg-baqh">Michigan</td> <td class="tg-baqh">$20,000/40,000/10,000</td> </tr> <tr> <td class="tg-baqh">Minnesota</td> <td class="tg-baqh">$20,000/40,000/10,000</td> </tr> <tr> <td class="tg-baqh">Mississippi</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Missouri</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Montana</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Nebraska</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Nevada</td> <td class="tg-baqh">$15,000/30,000/10,000</td> </tr> <tr> <td class="tg-baqh">New Hampshire</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">New Jersey</td> <td class="tg-baqh">$15,000/30,000/5,000</td> </tr> <tr> <td class="tg-baqh">New Mexico</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">New York</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">North Carolina</td> <td class="tg-baqh">$30,000/60,000/25,000</td> </tr> <tr> <td class="tg-baqh">North Dakota</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Ohio</td> <td class="tg-baqh">$12,500/25,000/7,500</td> </tr> <tr> <td class="tg-baqh">Oklahoma</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Oregon</td> <td class="tg-baqh">$25,000/50,000/20,000</td> </tr> <tr> <td class="tg-baqh">Pennsylvania</td> <td class="tg-baqh">$15,000/30,000/5,000</td> </tr> <tr> <td class="tg-baqh">Rhode Island</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">South Carolina</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">South Dakota</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Tennessee</td> <td class="tg-baqh">$25,000/50,000/15,000</td> </tr> <tr> <td class="tg-baqh">Texas</td> <td class="tg-baqh">$30,000/60,000/25,000</td> </tr> <tr> <td class="tg-baqh">Utah</td> <td class="tg-baqh">$25,000/65,000/15,000</td> </tr> <tr> <td class="tg-baqh">Vermont</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Virginia</td> <td class="tg-baqh">$25,000/50,000/20,000</td> </tr> <tr> <td class="tg-baqh">Washington</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">West Virginia</td> <td class="tg-baqh">$25,000/50,000/25,000</td> </tr> <tr> <td class="tg-baqh">Wisconsin</td> <td class="tg-baqh">$25,000/50,000/10,000</td> </tr> <tr> <td class="tg-baqh">Wyoming</td> <td class="tg-baqh">$25,000/50,000/20,000</td> </tr> </table> Source: ValuePenguin

Part 2 of 3: What happens if your car insurance lapses?

In many cases, drivers who do not keep their car insured can expect a ticket or fine. In many states, though, drivers should expect even steeper penalties, especially if they have more than one offense. If you do let your car insurance lapse, here are some of the things that can happen:
  • Tickets and fines: Many state law enforcement officials write tickets for driving without proof of insurance. Depending on the state, fines range from a few hundred dollars to several thousand dollars.
  • Suspended driver’s license: In addition, some states suspend a driver’s license for driving without insurance.
  • Suspended car registration: Along with a suspended license, states can also suspend your car registration for the uninsured car.
  • Impounded car: A few states also impound the car in question, requiring the payment of a fee to get it out, which can be extremely expensive.
  • Community service: Another possible penalty for driving uninsured includes community service.
  • Time in jail: Driving without insurance more than once can result in time in jail for drivers in some states.
  • Car repossession: Lenders can repossess the car in question if you drive it without insurance. When you bought the car, you signed a contract stating you would keep it insured at a certain level.

Part 3 of 3: What to do if your car insurance lapses

If your car insurance does lapse, you need to find new coverage or reinstate the old insurance policy. Most often this requires you to pay a late fee for allowing the car insurance to lapse in the first place. Calling your insurance company immediately upon learning of a lapse in coverage represents the best step to take.
Whether your insurance company reinstates your old insurance depends in part on your driving record. If the insurance company refuses to renew your coverage or offer you a new policy, then you need to find car insurance from another company.
As a rule, always make sure the car you drive has the minimum amount of coverage according to the state in which you live. Failure to do so can lead to monetary fines, a suspended license, and even time in jail.

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