Car Insurance with a Lapse in Coverage

How to find the best car insurance companies when you don't have an insurance history.

How to find affordable car insurance after a coverage lapse


The average price difference between an insurance policy for a driver with five consecutive years of coverage history and a driver with no recent auto insurance record is $216 per year. For an insurance company, covering a client with a lapse in coverage is riskier. To an insurer, you've shown either an inability to maintain your coverage, or you've chosen to drive while uninsured. However, some options exist for finding car insurance after a lapse in coverage. Let’s explore.


How much does car insurance cost after a coverage lapse?
  1. Why is car insurance so expensive after a lapse?
  2. Reinstatment after a lapse in coverage
  3. Cheapest companies after a lapse in insurance coverage
  4. Additional resources




Car insurance after a coverage lapse


There are a few reasons getting car insurance after a lapse in coverage is expensive and difficult. The primary reason is the additional risk posed by insuring a previously uninsured driver. Unless you’re a newly licensed driver, having a driving history without an insurance history is considered a sign of potential risk — similar to having a bad driving record. Below are average auto insurance rates based on the duration of car insurance history and common coverage levels.


AVERAGE ANNUAL PREMIUM — NO INSURANCE HISTORY
Insurance HistoryCar Insurance Premium$ Difference from No Insurance History
None$1,656--
6 Months — State Minimum Bodily Injury Limit$1,614$42
6 Months — 50-100 Bodily Injury Limit$1,539$117
1 Year — State Minimum Bodily Injury Limit$1,583$73
1 Year — 50-100 BI Limit$1,507$149
3 Years — State Minimum Bodily Injury Limit$1,547$109
3 Years — 50-100 Bodily Injury Limit$1,470$187
5 Years — State Minimum Bodily Injury Limit$1,510$147
5 Years — 50-100 Bodily Injury Limit$1,441$216

As you can see, the longer you carry car insurance and the higher coverage level you maintain, the lower your rate will be. A history of minimal car insurance coverage is another indicator of risk. Historical data shows drivers with lower levels of coverage tend to file more claims than do drivers with higher liability limits.


AVERAGE ANNUAL PREMIUM — BY COVERAGE LEVEL
Insurance HistoryCar Insurance Premium$ Difference from No Insurance History
Insurance HistoryAvg Annual Premium$ Difference from None
5 Years — State Minimum Bodily Injury Limit$1,510$147
5 Years — 50-100 Bodily Injury Limit$1,441$216
5 Years — 100-300 Bodily Injury Limit$1,405$252

By maintaining higher levels of coverage for five years, you can save $252 per year on your next insurance policy.

Another thing to keep in mind is eligibility. Certain companies will not sell a policy to drivers who haven't maintained continuous coverage for a certain duration. This relates to the risk associated with limited-history insurance clients. For instance, Farmers will not write a policy for a driver without continuous coverage for at least six months. This does not include newly licensed drivers.





Can you reinstate an insurance policy to avoid a lapse in coverage?


This is company specific. However, if your insurance company cancels your policy due to non-payment, you might be able to reinstate your policy if you make a payment and pay a reinstatement fee. Reinstating a canceled policy can help you avoid a coverage lapse.

If you wait too long, you might have to get an entirely new policy. The wait time will be dictated by your insurance company.





Cheapest insurance companies after a lapse in coverage


Now that we’ve outlined why it's difficult to find car insurance after a lapse in coverage, let’s look at rates from popular providers. Using the methodology outlined here, we discovered USAA and Nationwide are the cheapest companies for a driver with a lapse in coverage or limited insurance history.


AVERAGE ANNUAL PREMIUM — NO INSURANCE HISTORY
Insurance ProviderAverage Annual Premium
Allstate$5,272
Farmers$4,981
GEICO$2,935
Liberty Mutual$4,518
MetLife$5,086
Nationwide$2,575
Progressive$6,460
State Farm$4,468
USAA$2,566

Looking for a quote? Enter your zip code below to see rates based on your insurance and driving history.




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Additional resources



The big takeaway you should consider when getting car insurance after a lapse in coverage is to shop after around for six months. As you develop your insurance history, your rate will improve.

For more information relating to car insurance, see our additional information below.

Can you get car insurance without a driver’s license?
Best car insurance providers for a bad credit score
What should my auto insurance deductible be?
Penalities for driving without insurance