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.
| State | DMV/RMV insurance lapse fees |
|---|---|
| Alabama | Registration reinstatement fee of $200 on first offense and $400 on second offense |
| Alaska | License reinstatement fee of $100 for first lapse or $250 if combined with another non-DUI related offense |
| Arizona | License reinstatement fee of $50 |
| Arkansas | License reinstatement fee of $50 |
| California | License reinstatement fee of $14 |
| Colorado | Reinstatement fee of $40 |
| Connecticut | Reinstatement fee of $200 |
| Delaware | DMV lapse fee of $100 per vehicle and $5 per day after first 30 days |
| District of Columbia | DMV lapse fee of $150 and $7 per day after first 30 days to a maximum of $2,500 |
| Florida | Registration and license reinstatement fee of $150 for first lapse, $250 for second reinstatement, $500 for third or more within three years |
| Georgia | Lapse of more than 10 days incurs a $25 fee if not paid within 30 days along with a $60 reinstatement fee |
| Hawaii | License reinstatement fee of $20 in Honolulu County; other counties may differ |
| Idaho | License reinstatement fee of $85 |
| Illinois | Reinstatement fee of $100 |
| Indiana | Reinstatement fee $150 for the first offense, $225 for a a second offense, or $300 for a third offense |
| Iowa | Need to show proof of financial responsibility only after an accident, at which time at least $485 in penalties and fees incurred |
| Kansas | Reinstatement fee $100 for first offense, $300 for second offense within one year |
| Kentucky | registration reinstatement fee of $40 |
| Louisiana | DMV lapse fee of $125 for up to 30 days, $225 for 31 to 90 days, $525 for over 90 days |
| Maine | License reinstatement fee of $50, plus $20 to $30 additional fee and $35 registration reinstatement fee |
| Maryland | Uninsured motorist penalty fee of $150 for the first 30 days, $7 for each day thereafter, and registration restoration fee of up to $25 |
| Massachusetts | Reinstatement fee of $500 |
| Michigan | Registration reinstatement fee of $50 plus $25 if license was suspended |
| Minnesota | License and registration reinstatement fee of $30 |
| Mississippi | License reinstatement fee of $30 |
| Missouri | License reinstatement fee of $20 after first suspension, $200 after second suspension, $400 after third suspension |
| Montana | No charge for first lapse of insurance |
| Nebraska | Reinstatement fee of $500 |
| Nevada | Reinstatement 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 Hampshire | Only proof of financial responsibility is required |
| New Jersey | Restoration fee of $100 |
| New Mexico | Registration reinstatement fee of $30 |
| New York | Civil 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 Carolina | Civil 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 Dakota | No loss of license or registration on first offense |
| Ohio | Compliance fees up to $60, plus reinstatement fee of $100 for first offense, $300 for second offense, $600 for third offense |
| Oklahoma | Reinstatement fee of $275, plus $125 administrative fee |
| Oregon | License and registration reinstatement fee of $75 |
| Pennsylvania | Restoration fee of $88 |
| Rhode Island | Reinstatement fee of $30 to $50 |
| South Carolina | DMV lapse fee of $5 per day up to $200, plus $550 uninsured motorist fee |
| South Dakota | License reinstatement fee of $50 to $200, depending on length of non-compliance, and $28 application fee |
| Tennessee | License and registration restoration fee of $65, plus $50 administrative fee |
| Texas | Reinstatement fee of $100 |
| Utah | Reinstatement fee of $100 |
| Vermont | Driver’s license reinstatement fee of $71 |
| Virginia | Registration reinstatement fee of $145 |
| Washington | Reinstatement fee of $75 |
| West Virginia | Registration reinstatement fee of $100 |
| Wisconsin | License reinstatement fee of $60 |
| Wyoming | Reinstatement 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:
| State | Average rate | After lapse | % increase | $ increase |
| Michigan | $2,368 | $3,497 | 48% | $1,129 |
| Massachusetts | $1,616 | $2,176 | 35% | $560 |
| New Jersey | $1,419 | $1,851 | 30% | $432 |
| Illinois | $1,176 | $1,499 | 27% | $323 |
| Georgia | $1,815 | $2,308 | 27% | $493 |
| Minnesota | $1,339 | $1,699 | 27% | $360 |
| Hawaii | $1,255 | $1,577 | 26% | $322 |
| Nevada | $1,578 | $1,976 | 25% | $398 |
| Virginia | $993 | $1,194 | 20% | $201 |
| Texas | $1,644 | $1,973 | 20% | $329 |
| Maryland | $1,541 | $1,809 | 17% | $268 |
| New Mexico | $1,498 | $1,755 | 17% | $257 |
| Tennessee | $1,339 | $1,563 | 17% | $224 |
| Pennsylvania | $1,438 | $1,663 | 16% | $225 |
| Indiana | $1,057 | $1,221 | 16% | $164 |
| Colorado | $1,675 | $1,933 | 15% | $258 |
| DC | $1,887 | $2,168 | 15% | $281 |
| Arizona | $1,399 | $1,586 | 13% | $187 |
| Connecticut | $1,980 | $2,227 | 12% | $247 |
| Washington | $1,307 | $1,462 | 12% | $155 |
| Louisiana | $2,228 | $2,486 | 12% | $258 |
| Kentucky | $1,611 | $1,796 | 11% | $185 |
| Idaho | $1,019 | $1,135 | 11% | $116 |
| Florida | $2,250 | $2,503 | 11% | $253 |
| Rhode Island | $2,011 | $2,229 | 11% | $218 |
| Delaware | $1,838 | $2,037 | 11% | $199 |
| Alabama | $1,304 | $1,442 | 11% | $138 |
| West Virginia | $1,467 | $1,622 | 11% | $155 |
| Oklahoma | $1,469 | $1,624 | 11% | $155 |
| Iowa | $1,073 | $1,173 | 9% | $100 |
| Ohio | $959 | $1,048 | 9% | $89 |
| South Carolina | $1,353 | $1,475 | 9% | $122 |
| South Dakota | $1,250 | $1,358 | 9% | $108 |
| Missouri | $1,288 | $1,399 | 9% | $111 |
| Nebraska | $1,287 | $1,385 | 8% | $98 |
| Oregon | $1,325 | $1,424 | 7% | $99 |
| Wisconsin | $1,147 | $1,229 | 7% | $82 |
| Utah | $1,212 | $1,297 | 7% | $85 |
| Wyoming | $1,577 | $1,686 | 7% | $109 |
| Montana | $1,589 | $1,694 | 7% | $105 |
| Mississippi | $1,504 | $1,601 | 6% | $97 |
| Kansas | $1,412 | $1,501 | 6% | $89 |
| Vermont | $1,166 | $1,237 | 6% | $71 |
| Arkansas | $1,556 | $1,647 | 6% | $91 |
| Alaska | $1,246 | $1,317 | 6% | $71 |
| New Hampshire | $1,156 | $1,218 | 5% | $62 |
| North Dakota | $1,123 | $1,166 | 4% | $43 |
| North Carolina | $1,170 | $1,173 | 0% | $3 |
| California | $1,783 | $1,783 | 0% | $0 |
| Maine | $884 | $884 | 0% | $0 |
| New York | $1,214 | $1,214 | 0% | $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.