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Lapse in coverage: Penalties by state

What happens if your car insurance lapses?

If your car insurance lapses for any reason, the state may take away your driving privileges and fine you to reinstate them, even if you weren’t caught driving. That’s because if you have a vehicle registered under your name, the state assumes you’re driving it. And in every state but New Hampshire, driving without a minimum level of liability insurance is against the law.

Because uninsured drivers have become such a costly problem -- nationally one out of every eight drivers doesn’t carry insurance -- states are increasingly using electronic reporting systems to find out directly from insurers when a vehicle owner is past due on his bill. If that happens, you may not be charged with the crime of driving while uninsured, which can carry steep penalties. But in nearly every state you will have your registration, driver’s license, or both, revoked and then be charged anywhere from an $8 daily fee to an immediate $250 fee to reinstate them. The DMV fees listed below are only for those portions of the costs, and do not include criminal fines, court fees or other costs associated with

driving without insurance.

Below are the fees charged by the DMV when they’ve learned that a registered vehicle owner hasn’t paid his vehicle insurance.

StateDMV/RMV insurance lapse fees
AlabamaRegistration reinstatement fee of $200 on first offense and $400 on second offense
AlaskaLicense reinstatement fee of $100 for first lapse or $250 if combined with another non-DUI related offense
ArizonaLicense reinstatement fee of $50
ArkansasLicense reinstatement fee of $50
CaliforniaLicense reinstatement fee of $14
ColoradoReinstatement fee of $40
ConnecticutReinstatement fee of $200
DelawareDMV lapse fee of $100 per vehicle and $5 per day after first 30 days
District of ColumbiaDMV lapse fee of $150 and $7 per day after first 30 days to a maximum of $2,500
FloridaRegistration and license reinstatement fee of $150 for first lapse, $250 for second reinstatement, $500 for third or more within three years
GeorgiaLapse of more than 10 days incurs a $25 fee if not paid within 30 days along with a $60 reinstatement fee
HawaiiLicense reinstatement fee of $20 in Honolulu County; other counties may differ
IdahoLicense reinstatement fee of $85
IllinoisReinstatement fee of $100
IndianaReinstatement fee $150 for the first offense, $225 for a a second offense, or $300 for a third offense
IowaNeed to show proof of financial responsibility only after an accident, at which time at least $485 in penalties and fees incurred
KansasReinstatement fee $100 for first offense, $300 for second offense within one year
Kentuckyregistration reinstatement fee of $40
LouisianaDMV lapse fee of $125 for up to 30 days, $225 for 31 to 90 days, $525 for over 90 days
MaineLicense reinstatement fee of $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 thereafter, and registration restoration fee of up to $25
MassachusettsReinstatement fee of $500
MichiganRegistration reinstatement fee of $50 plus $25 if license was suspended
MinnesotaLicense and registration reinstatement fee of $30
MississippiLicense reinstatement fee of $30
MissouriLicense reinstatement fee of $20 after first suspension, $200 after second suspension, $400 after third suspension
MontanaNo charge for first lapse of insurance
NebraskaReinstatement fee of $500
NevadaReinstatement fee of $251 plus a fine of $250 if lapse was 31 to 90 days, $500 if lapse was 91 to 180 days, and $1,000 if lapse was more than 181 days
New HampshireOnly proof of financial responsibility is required
New JerseyRestoration fee of $100
New MexicoRegistration reinstatement fee of $30
New YorkCivil penalty of $8 per day for lapses of insurance for the first 30 days, $10 per day for the second 30 days, and $12 per day for the third 30 days
North CarolinaCivil penalty of $50 for the first insurance lapse in a three-year period, $100 for the second lapse, $150 for third and subsequent lapses
North DakotaNo loss of license or registration on first offense
OhioCompliance fees up to $60, plus reinstatement fee of $100 for first offense, $300 for second offense, $600 for third offense
OklahomaReinstatement fee of $275, plus $125 administrative fee
OregonLicense and registration reinstatement fee of $75
PennsylvaniaRestoration fee of $88
Rhode IslandReinstatement fee of $30 to $50
South CarolinaDMV lapse fee of $5 per day up to $200, plus $550 uninsured motorist fee
South DakotaLicense reinstatement fee of $50 to $200, depending on length of non-compliance, and $28 application fee
TennesseeLicense and registration restoration fee of $65, plus $50 administrative fee
TexasReinstatement fee of $100
UtahReinstatement fee of $100
VermontDriver’s license reinstatement fee of $71
VirginiaRegistration reinstatement fee of $145
WashingtonReinstatement fee of $75
West VirginiaRegistration reinstatement fee of $100
WisconsinLicense reinstatement fee of $60
WyomingReinstatement fee of $50

Can I keep my license plates and car registration during an insurance lapse?

To avoid these penalties, always turn in your license plates and cancel your registration if you plan to have a lapse in car insurance. Better yet, contact your insurer, who is likely to work to keep good customers. Insurers are supposed to give you a 30-day advance notice before canceling your policy.

"If you miss a payment, the important thing to do is get in contact with them right away," says Bob Passmore, assistant vice president of personal lines policy for the Property Casualty Insurance Association of America. “So you’ll get a lot of opportunities to make it right.

Is there a grace period for car insurance?

No, there is not a grace period. If you don’t pay your car insurance bill by the due date, your coverage is canceled right away. That means you are not covered if you have an accident or your car is damaged, and will be responsible for paying for medical bills, vehicle repairs and property damage.

How much will my rate go up if I have an insurance lapse?

A lapse in coverage for a week up to 30 days will hike your car insurance rate by an average of nine percent, or about $130, a year. A 60-day lapse gets you a 13 percent increase, about $190 more a year. But you'll see in the chart below that in some states a 60-day lapse can cost as much as 20 to 48 percent more.

If you still want to suspend coverage, keep in mind that even if you follow the law and submit your plates, you still may be charged more for insurance after you’ve had a lapse of, say, more than 30 days. Insurers say their statistical models show that drivers who haven’t carried steady, uninterrupted insurance coverage tend to file more claims, and so cost the insurance company more.

Some insurance companies won’t even take customers who can’t show six months of prior coverage, forcing drivers to shop from high-risk providers for as much as double the price. “If you’re in that situation, there a lot of companies that specialize in high-risk drivers,” says Passmore. “Shop around. They might only charge more for six months.

That said, some states don’t allow insurers to charge more if a lapse was due to overseas military service, hospitalization or job loss.

Here is how much more you will pay, on average, per year if your insurance lapses for 60 days:

StateAverage rateAfter lapse% increase$ increase
New Jersey$1,419$1,85130%$432
New Mexico$1,498$1,75517%$257
Rhode Island$2,011$2,22911%$218
West Virginia$1,467$1,62211%$155
South Carolina$1,353$1,4759%$122
South Dakota$1,250$1,3589%$108
New Hampshire$1,156$1,2185%$62
North Dakota$1,123$1,1664%$43
North Carolina$1,170$1,1730%$3
New York$1,214$1,2140%$0

*Methodology: Rates are averaged for 10 ZIP codes in each state from up to six major insurers for full coverage with a $500 deductible. Note that in some cases insurance companies won't sell a policy to someone who has had a major lapse in coverage; in the table above states with zero increase are cases in which insurers would not provide a quote for a new policy.

How to buy car insurance after an insurance lapse

Despite the challenges of

buying car insurance after an interruption in coverage, it’s still wise to research rates. Each insurance company assesses risk differently, so even if you have a lapsed policy, you can still find a lower rate by doing a

car insurance comparison. For instance, some

insurers specialize in high-risk driver policies, so you may get a more affordable price from one of those carriers.