What happens if you miss an insurance payment?

Will your insurance company drop you?

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Alani Asis

Alani Asis is a personal finance writer with nearly three years of experience in the space. She has worked with leading publications and brands cover…

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Kristine Lee

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Kristine is a licensed insurance agent who joined The Zebra in 2019 as an in-house content researcher and writer. Before joining The Zebra, she was a…

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Susan Meyer

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Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

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Payment mishaps

If you find out that you've missed a payment, don't fret. Car insurance companies usually offer grace periods to make up your payment without penalty. However, say you don't pay your bill during the grace period, and your coverage ends. Driving during a car insurance lapse may result in legal and financial consequences.

Whether or not you’re in your grace period, you can still take action to mitigate the consequences, get back on track and correct your non-payment.

Are you still insured if you miss an insurance payment?

If you miss a car insurance company by a few days, you may still be in your auto policy grace period. A grace period is the timeframe your insurer forgives a late payment. Grace periods usually last seven to 30 days, but it can vary by insurance company.

What happens with a late car insurance payment?

After your grace period ends, your insurance company may cancel your policy. And policy cancellations can cause your coverage to lapse. 

Policy cancellations 

After your grace period, your auto insurance company may terminate your policy. Before then, your insurer may send you a payment reminder via mail or email. If your policy ends and you don't have another policy lined up, your insurance coverage could lapse. 

Coverage lapses

A lapse in car insurance is the length of time you remain uninsured after your coverage ends. Policy lapses can have financial and legal effects.

Firstly, if you don't have an active car insurance policy, you won't receive coverage after an at-fault car accident. Then, you're responsible for your and the other party's medical and vehicle repair expenses, which can result in thousands of dollars in out-of-pocket expenses.

If you reinsure yourself after a coverage lapse, you may have to pay higher car insurance rates on your new policy. Statistically, drivers with less insurance are more likely to file claims than those with higher liability limits. So, insurers tend to see drivers with a coverage lapse as higher risk. 

Secondly, driving without insurance has legal consequences. Unless you live in New Hampshire, each state requires drivers to carry the minimum insurance coverage. If you drive uninsured, you may face fines between $25 and $5,000 and you could face license suspension.

Thirdly, if you're caught driving uninsured, you may need an SR-22 certificate from your insurance company. An SR-22 certificate helps states identify which high-risk driver has the minimum liability limits. And many insurers won't file and offer coverage to high-risk drivers needing an SR-22.

Finally, if you have an outstanding car loan, your lender will likely require comprehensive and collision insurance. Insufficient coverage may result in your lender repossessing your vehicle. 

What to do if you forgot to pay a car insurance payment

Missing your auto insurance payment by a few days doesn't automatically mean your insurer will cancel your policy. But you risk your policy cancellation and coverage lapsing by not taking action.

  • Check if you're in your grace period: Review your policy or contact your insurance company to see if you can still pay your bill. If you're in your grace period, pay your auto insurance premium immediately. 

  • Ask to reinstate your policy: If you're outside your grace period or have received a cancellation notice, contact your insurance agent to see if they'll make an exception. You may have to pay reinstatement or late fees to have your policy reactivated. 

  • Look for a new policy: If your insurance company refuses to reinstate your policy, search for new car insurance coverage. While your premiums may increase due to the lapse in coverage, comparing quotes can help you find the best coverage at the lowest price.

How to avoid late car insurance payments

Avoiding a late car insurance payment is the best way to prevent your policy from ending and your coverage from lapsing. Some ways to avoid a late payment are adjusting your coverage to lower your rates or placing your policy on automatic payments.

Activating auto-pay can help you pay your car insurance bill on time. Many insurers also offer discounts for putting your policy on auto-pay. 

It’s a good idea to carry car insurance, regardless of how little you drive as a lapse in coverage can cause your car insurance premium to increase. Also, driving uninsured is illegal in most states.

Several factors are leading many to see significantly higher rates in their auto insurance coverage. If you can't afford your policy, consider opting out of coverages you don't need, downgrading to a liability-only policy or increasing your insurance deductible. Low mileage drivers can switch to usage-based insurance, which determines your rate based on how much you drive.

If you still can't lower your current policy's rates, don't hesitate to shop for a new one. Comparison shopping is the best way to find cheap and reliable car insurance companies. Using an online quote comparison tool can help you see quotes from multiple reputable insurance companies simultaneously. 

What happens if you miss an insurance payment? FAQs


Does your insurance cancel if you miss a payment?

It depends. Generally, insurance companies offer seven to 30-day grace periods. It's essential to check your insurance company's policy as some insurers don't have grace periods and you may have a canceled policy after a missed payment

How many days late can you pay your insurance?

It depends. Many insurance companies offer grace periods seven to 30 days after the due date. During your grace period, your coverage remains active, and you can pay your bill without penalties. Be sure to review your policy or contact your insurance company for more information on their late payment policy.

Does missing a car insurance payment hurt your credit?

Insurance companies don't report your insurance payments to credit bureaus, so missing a payment won't affect your credit score immediately. However, if your insurance bill goes to a collection agency, your credit score will start to take a hit. 

Do car insurance companies report late payments?

Car insurance companies don't report your premium payments to the bureaus. However, if you continue to let your bill go unpaid, your insurer may send it to a collection agency. At this point, you may see your credit score drop.