A lapse in car insurance coverage occurs when a policy holder does not pay their premium. Typically a car insurance company will give the customer 2-4 weeks after the bill is due before cancelling the driver’s coverage for non-payment.
If you do not pay your auto insurance premium on time and experience a lapse in auto insurance coverage, your car insurance company may raise your rates as a result. Also, many times auto insurance companies will offer their customers a discount for having continuous coverage. If you experience a lapse in coverage you may no longer be eligible or this discount.
Aside from your auto insurance, you may also be fined by your local department of motor vehicles for having a lapse in your insurance coverage on a registered vehicle. Most states require registered motor vehicles to maintain continuous auto insurance coverage in order to remain registered by the state.
If you are having trouble paying your auto insurance premium on time, you may want to discuss different payment options with your car insurance company. It might be better for you to pay your premium as a lump sum once or twice a year instead of monthly. Another option is having your auto insurance premium automatically debited from your bank account every month. Some companies will offer additional discounts for these types of payment methods as well.