What happens if I have a lapse in car insurance coverage?

If you have ever wondered what happens if I have a lapse in car insurance, you are not alone. Unfortunately, each year millions of people who let their car insurance lapse discover what can happen the hard way.

Drivers who let their car insurance lapse often have their cars repossessed by the bank can have their license suspended by the state, can get arrested for driving with a suspended license and can be held personally liable for any damages if ever in an accident.

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Is there a grace period for car insurance?

If you forget to pay your insurance premium or you are unable to do so, some insurance providers offer a grace period before your coverage will lapse, but this isn’t the case with every insurance provider.

Read more:

• How can I get car insurance if my policy coverage lapses?
• Do I have a grace period on car insurance?

If you can’t make a payment, speak to a representative from your auto insurance company and explain the situation. Most likely, they will be able to work out a payment plan with you so you can keep your coverage.

Failure to maintain continuous coverage will also cause your future insurance premiums to be much higher.

Can a lienholder repossess your car over a lapse in coverage?

If you do not own your vehicle outright and are making payments to a bank or finance company, you are required to secure and maintain car insurance on your vehicle at all times.

Failure to secure and maintain an active car insurance policy can and will result in the loss of your vehicle.

Whenever a driver has a lapse in car insurance, the car insurance company has a duty to notify the lienholder of that lapse. That is because the lienholder is the official owner of the car.

Once notified, a lienholder will normally contact you to discuss the lapse in car insurance.

If the lapse in car insurance is not cleared up, the lienholder will take the steps to repossess your car. Lienholders have a vested interest in protecting any car that they own.

Whether you are making timely payments or not, if you do not maintain an active auto insurance policy on your vehicle, the lienholder will have every right to repossess the vehicle.

If you have let the car insurance lapse on your vehicle, you must take the time to secure a new car insurance policy now.

Failure to secure the proper car insurance coverage may lead to your car being repossessed by the bank.

Can your driver’s license be suspended over coverage lapses?

Another consequence of letting your car insurance lapse is your driver’s license can and will get suspended by the State. You face the potential of a vehicle registration suspension as well. You will then have to pay a reinstatement fee to get your license and registration back.

Once you have a lapse in car insurance, your car insurance company will report the lapse to the Department of Motor Vehicles in your state.

Once reported, your license will be suspended until you clear up the car insurance lapse and bring proof of car insurance into the Department of Motor Vehicle that services your state.

In most states, it is illegal to own and possess a car without car insurance.

If your car insurance has lapsed it is important that you make plans to secure a new policy or go to the Department of Motor Vehicles to surrender the plates to your vehicle.

If you don’t, your driver’s license will be suspended and you will have to pay a fee to get your license reinstated. The fees to get your license reinstated are very costly.

Typically, you will have to pay a certain amount of money for each day of suspension, so getting your license reinstated could be very costly.

What happens if you drive with a suspended license?

Drivers who drive with a suspended license can get arrested for driving while under suspension. If your lapse in car insurance is reported to the state and your license is suspended, you may not operate a vehicle in your state.

If you choose to operate a vehicle and are stopped by the police, you may be arrested for driving with a suspended license and could even face jail time.

Many drivers are unaware of all the consequences of letting their car insurance lapse.

To avoid getting arrested for driving while under a license suspension, take the time to generate quotes from multiple insurance companies online now.

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What happens if you’re in an accident and you don’t have insurance?

Although some states have uninsured motorist coverage, if you operate your vehicle and are in an accident and you don’t have auto insurance coverage at the time, you may be held personally liable for any and all damages.

One of the main reasons why drivers must always have an active car insurance policy is to protect their investment and make sure they are covered if they are in a car accident.

If your car insurance has lapsed and your vehicle is involved in an accident, the owner of the vehicle can be held personally liable for any damages.

In addition to being liable for damages sustained by others, drivers who let their auto insurance lapse will also be liable to the bank for any damages to the car itself.

That is why it is important to maintain an active car insurance policy on your vehicle at all times. Failure to keep an active policy can result in the loss of a large sum of money.

If you have let the insurance on your vehicle lapse for any length of time, it is important that you take action right now and secure the proper coverage for your vehicle today.

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