Auto Insurance Companies That Don’t Charge You for a Lapse in Coverage (2021)

Most auto insurance companies do charge you for a lapse in coverage, but not directly. Auto insurance companies that don't charge you for a lapse in coverage send your uninsured status to your local DMV, where you need to pay a reinstatement fee plus the monthly payment you missed. Opt for liability-only coverage to make auto insurance cheaper, which is 51% cheaper than full coverage. Shop around and compare multiple companies until you find the best rates.

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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: Sep 28, 2021

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A Concise Overview

  • You’ll have to pay a reinstatement fee to restart your auto insurance coverage
  • Some auto insurance companies report your uninsured status to your local DMV
  • Drivers can lose their driving privileges for a lapse in coverage

Are you searching for car insurance companies that don’t charge for a lapse in coverage? Car insurance after a lapse in coverage can drive up future insurance rates.

But don’t worry – we’ll show you the cheapest auto insurance for a lapse in coverage.

Our guide explores why auto insurance coverages go up when you have a lapse in insurance. Also, we’ll explain where you can find the best car insurance after a lapse in coverage.

Once you learn everything about auto insurance companies that don’t charge you for a lapse in coverage, enter your ZIP code in the free comparison tool above to compare multiple companies in your area.

What are the best auto insurance companies that don’t charge you for a lapse in coverage?

Generally, car insurance companies charge you for a lapse in coverage when you have to reinstate your policy.

The amount you usually have to pay is the cost of your monthly policy plus the reinstatement fee and late fee.

A lapse in coverage means that there was a period where you didn’t have the minimum auto insurance requirements.

In addition to paying the last payment before your policy is canceled, a car insurance gap in coverage can generate more expensive rates when you want to reinstate your policy or purchase a new one.

To prevent a lapse in coverage, you can suspend your auto insurance policy, but you can’t drive your vehicle.

Suspending your car insurance policy prevents you from losing your driving privileges and pauses your insurance policy.

What causes a lapse in auto insurance coverage?

Three things can cause a lapse in car insurance coverage. Check out the list below to see those reasons.

  • Your policy was canceled for more than 30 days
  • An auto insurance policy was canceled because of non-payment
  • You were uninsured because you weren’t in the country

A lapse in auto insurance increases your rates, suspends your driver’s license, and fines you with a DMV penalty.

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Why do auto insurance companies charge you for a lapse in coverage?

Auto insurance companies that do charge you for a lapse in coverage are up front on how much you owe.

If you have a lapse in coverage, car insurance companies consider you a high risk. Therefore, future auto insurance rates will be much higher than average.

According to the National Association of Insurance Commissioners (NAIC), the average cost of full coverage auto insurance is $90 a month.

But a lapse in car insurance coverage can put you in a high-risk pool. Here’s a list of the best auto insurance companies and how much they charge for high-risk auto insurance per month.

  • Allstate – $187/month
  • Farmers – $157/month
  • GEICO – $111/month
  • Liberty Mutual – $186/month
  • Nationwide – $136/month
  • Progressive – $157/month
  • State Farm – $108/month
  • USAA – $98/month

These monthly rates reflect the cost for drivers who have no insurance history.

A driver with no car insurance history correlates to the same risk as a person who has a bad driving record. However, driving without insurance is more costly.

Why does a lapse in auto insurance make you a high-risk driver?

Gaps in coverage mean you were uninsured after losing coverage. Car insurance companies can’t determine whether you were driving illegally or legally.

Also, it shows that you may have owned an uninsured vehicle. According to some auto insurance companies, this period of being uninsured increases your risk of filing claims.

Therefore, you’ll be considered a high-risk driver. And as a high-risk driver, you could pay double the cost of auto insurance.

But car insurance companies like The General, Dairyland, and Direct Auto provide affordable car insurance for high-risk drivers.

How do I prevent a lapse in auto insurance coverage due to nonpayment?

Contact your car insurance company and let them know you may have trouble paying your monthly payment.

Most auto insurance companies have a 30-day grace period, which is a time where you can make a late payment before your policy is canceled.

How can I avoid expensive auto insurance rates?

Car insurance discounts are some of the best ways to bring down expensive monthly rates.

If you don’t qualify for significant auto insurance deals, try switching to liability-only insurance. The latest NAIC report shows that liability coverage is 51% cheaper than full coverage auto insurance.

Does keeping auto insurance longer make monthly rates cheaper?

Carrying auto insurance longer can make your rates more affordable over time. For example, a six-month car insurance policy you have will get cheaper the longer you have it.

Take coverage a step further and increase your coverage level. We recommend getting a medium or medium-high coverage level to make sure you have enough to cover bodily injury and property damage expenses.

What if an auto insurance company doesn’t accept your policy request?

Don’t give up. Keep shopping around until you find a car insurance company that will accept your policy.

If you’re having trouble locating a company, go to your local DMV and ask them to help you find coverage.

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Auto Insurance Companies That Don’t Charge You for a Lapse in Coverage: The Bottom Line

Car insurance companies don’t directly charge you for a lapse in coverage, but a lapse could generate reinstatement fees with your former company.

If you decide to shop with another company, the new auto insurance company requires you to pay off the bill with your previous insurance company before starting a policy.

Now that you know more about auto insurance companies that don’t charge you for a lapse in coverage, use our free online quote tool to shop with the best insurance companies in your area.

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