Auto Insurance Canceled for Non-Payment

Auto insurance canceled for non-payment can put you in a tough spot. Your auto insurance company can also report your uninsured status to the DMV of your state, adding a reinstatement fee to your list of costs. You can avoid auto insurance cancelation by making payment arrangements if it's too expensive. Compare companies and shop around to find the best rates after you've paid your current premium.

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent

UPDATED: Mar 30, 2021

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A Concise Overview

  • Auto insurance companies will notify you before they cancel your policy for non-payment.
  • You’ll have to pay a fee in addition to your monthly premium to reinstate your car insurance.
  • An auto insurance company won’t grant you a new policy if you still owe your previous provider.

Car insurance canceled for non-payment isn’t good for your insurance record. One of the first things auto insurance companies check is whether you can pay auto insurance rates. If you don’t pay your premium, you risk having a gap in auto insurance coverage.

Any gaps in auto insurance will force you into high-risk auto insurance options. If your premiums are too expensive, you’ll need to pay the premium of any canceled car insurance due to non-payment before you move on to another company.

Continue reading this article to learn more about your options when you’re close to losing your auto insurance policy because of non-payment.

If you’ve already paid your premium from car insurance canceled for non-payment and want to start shopping, enter your ZIP code in the free comparison tool above.

Can an auto insurance company cancel your policy for non-payment?

Yes. Before a car insurance company cancels your policy, you’ll get a notice by mail or email that your policy is about to be canceled. Your auto insurance company will always give you a chance to make a payment before your policy is canceled.

You could ask for an extension or make payment arrangements if you plan to find a policy with another company. Missing a payment means your auto insurance account is past due.

Some car insurance companies have grace periods, which give you several days after paying for your premium. Car insurance cancelation for non-payment usually occurs sometime after a cancelation notice has been disregarded.

What if I can’t afford the auto insurance payment?

Alert your auto insurance company right away that the premium is too expensive. An agent may connect you to discounts to reduce your premium, or an agent may suggest less coverage, such as liability-only auto insurance.

Your previous and more expensive monthly rate may be arranged in a payment arrangement. Each company is different, so ask your auto insurance provider how to lower your monthly auto insurance rates.

Can you stop an auto insurance policy from being canceled due to non-payment?

All you have to do is pay your bill before the cancelation date. After the grace period, your car insurance company will notify you that your policy is due for cancelation if payment isn’t received by a specific date. Once you make a payment, your account should get rid of the cancellation alert.

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Can you reinstate an auto insurance policy after non-payment cancelation?

Absolutely. Your car insurance company may have canceled your coverage, but you can reinstate your coverage by making the monthly payment. However, you will have to pay a fee based on the laws of your state.

Your auto insurance provider may report your auto insurance lapse to your state DMV/BMV/RMV. The fees or fines will depend on the state where you live. Here’s a list of fees that correspond to each state.

Auto Insurance Reinstatement Fees
StatesAuto Insurance Reinstatement, Restoration, Insurance Lapse Fees
Alabama$200 for the first offense, $400 for the second offense
Alaska$100 for the first lapse or $250 if DUI is involved
Arizona$50
Arkansas$50
California$14
Colorado$40
Connecticut$200
Delaware$100 per vehicle and $5 per day after 30 days
District of Columbia$150 and $7 per day after first 30 days (maximum of $2,500)
Florida$150 for the first lapse, $250 for the second lapse, $500 for the third lapse, and subsequent lapses
Georgia$25 after 10 days, $60 after 30 days
Hawaii$20 in Honolulu County, Other Hawaii counties vary
Idaho$85
Illinois$100
Indiana$150 for the first offense, $225 for the second offense, $300 for the third offense
IowaShow proof of auto insurance only if you've had an accident (you could pay as low as $485).
Kansas$100 for the first offense, $300 for the second offense (must be within one year)
Kentucky$40
Louisiana$125 for up to 30 days, $225 for 31 to 90 days, $525 for over 90 days
Maine$50, plus $20 to $30 additional fee and $35 registration reinstatement fee
MarylandUninsured motorist penalty fee of $150 for the first 30 days, $7 for each day after that, and registration restoration fee of $25
Massachusetts$500
Michigan$50 (plus $25 if the license was suspended)
Minnesota$30
Mississippi$30
Missouri$20 after the first suspension, $200 after the second suspension, $400 after the third suspension
MontanaNo fee for lapsed auto insurance
Nebraska$500
Nevada$251 plus a fine of $250 if the lapse was 31 to 90 days, $500 if the lapse was 91 to 180 days, and $1,000 if the lapse was more than 181 days
New HampshireShow proof of auto insurance
New Jersey$100
New Mexico$30
New York$8 per day for lapses of auto insurance for the first 30 days, $10 per day for the second 30 days, and $12 per day for the third 30 days
North Carolina$50 for the first insurance lapse in three years, $100 for the second lapse, $150 for third and subsequent lapses
North DakotaNo loss of license or registration on the first offense
Ohio$60 (plus a reinstatement fee of $100 for the first offense, $300 for the second offense, $600 for the third offense)
Oklahoma$275 (plus $125 administrative fee)
Oregon$75
Pennsylvania$88
Rhode Island$30 to $50
South Carolina$5 per day up to $200 (plus $550 uninsured motorist fee)
South Dakota$50 to $200 (depending on the length of non-compliance and $28 application fee)
Tennessee$65 (plus $50 administrative fee)
Texas$100
Utah$100
Vermont$71
Virginia$145
Washington$75
West Virginia$100
Wisconsin$60
Wyoming$50
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Each state has different rules and fees when your auto insurance lapses. A car insurance premium may seem costly, but it’s better to make an effort to pay your monthly premium. Some fees carry fees that rival the cost of monthly car insurance.

What does it mean when my auto insurance policy is canceled due to non-payment?

When your car insurance policy is canceled due to non-payment, you won’t be insured. This creates a gap in auto insurance coverage. According to New York’s DMV, any period where you don’t have the minimum car insurance requirements is a lapse in car insurance.

During this time, another auto insurance company won’t allow you to buy auto insurance until you pay your previous provider’s monthly installment. Your missed payment and cancellation goes toward your insurance record.

How does auto insurance cancelation for non-payment affect your rates?

Cancelations for non-payment on your insurance record could turn you into a high-risk driver, which means you’ll see more expensive auto insurance quotes.

A high-risk status doesn’t disqualify you for affordable auto insurance. Even with a non-payment cancelation on your insurance record, you can find cheap auto insurance when you comparison shop.

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Auto Insurance Canceled for Non-Payment: The Bottom Line

It’s in your best interest to avoid cancelation due to non-payment. Reinstatement requires you to pay your premium and the state fees. If you can’t afford the auto insurance cost, talk to an agent about payment arrangements.

You’ll save some time to avoid cancelation and stay insured. Once you have an agreement with your current car insurance company, start comparing other companies to find cheaper car insurance.

Don’t wait until your car insurance is canceled for non-payment. As you’re paying your premium, enter your ZIP code in the free comparison tool below to compare quotes from companies in your local area.

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