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by Indiana Farm Bureau Insurance

What happens when your car insurance lapses?

  • Joel Abrahamson, Property & Casualty Product Manager
    Joel Abrahamson, Property & Casualty Product Manager  | Jul 5, 2022
    Social Profile | LinkedIn
Man smiling out of his car

Car insurance is mandatory in the state of Indiana. That is one reason why keeping continuous coverage on your vehicle is so important. If you buy a car, it is important to know that proof of car insurance is required to register the car with the Indiana Bureau of Motor Vehicles. Additionally, maintaining this valuable insurance protection requires paying your premium ahead of the renewal date. However, there are still a few different ways in which insurance can lapse. 

 

One common way is that you simply forgot to pay your car insurance premiums on time. Life can get hectic, but ensuring that you pay your auto insurance premiums on time is one of the best ways you can prevent an insurance policy lapse. Indiana Farm Bureau Insurance offers many payment option options, including automatic payments with electronic funds transfer (EFT). Contact your insurance provider to learn more about your automatic payments.  

 

Another way a car insurance lapse could occur if a person who is on paper billing may move and forget to update their billing address. A way you can avoid this is by going paperless or making sure to notify your insurance company when you move. You can receive a 5% discount on a qualifying auto insurance policy by signing up for paperless policy documents in your online management account. Not only are you saving money on your insurance, you can also view your policy documents in an accessible electronic file 24/7 and help reduce paper usage.  

A car insurance lapse can result in major consequences. If you were to get pulled over by the police without insurance, the consequences could result in fines; if you were to get into an accident, you could be on the hook to pay for damages out of pocket.  

 

What happens if you miss your car insurance payment by a few days?  

 

If you miss your car insurance payment by a few days, then your policy will most likely be canceled.  

 

Because of that, it is important that you maintain continuous insurance coverage on your car by making your premium payments on time. Your policy will be canceled if the required premium payment is not made by the due date. Even a day late can cause your policy to be canceled.  

 

When this happens, you do not have the financial protection that the insurance provides, and you are not fulfilling legal requirements. That means if you were to get into an accident while you don’t have insurance you could end up paying a lot of money for damages and possibly have your license suspended. 

 

Car insurance lapse grace period 

 

Generally, there is no grace period if you miss your premium’s due date. The company must receive the premium by the due date or you risk having your policy canceled, leaving you without insurance coverage. 

 

State law in Indiana requires your insurance company to alert you before canceling your policy for unpaid premium, so that you have time to pay your premium before you lose coverage.  

 

If you don’t make that payment then your car insurance will be canceled, and you will not have coverage.  

 

Penalties of car insurance lapse 

 

Insurance companies typically have higher premiums for people who have had a lapses in their insurance coverage. Paying your premium by the due date is a smart way to help keep the price of your insurance lower.  

 

If your policy lapses, in addition to potential higher premiums, you may also have to pay a reinstatement fee and/or a late fee. If you get in an accident and do not have insurance, you risk the financial impact and could face stiff fines and even have your license suspended. 

 

These severe consequences are reason enough to make sure to pay your car insurance premium on time and make sure you have the coverage you need in case the unexpected occurs. When deciding how often you will be making car insurance premium payments, set events on your phone’s calendar so that it will alert you when your premium is due.  


Here is a list of just some of the consequences if your car insurance lapses:  

 

  • Not having insurance coverage 

  • Rate increase  

  • Potential loss of drivers’ license  

  • Fines  

 

If you are insured with Indiana Farm Bureau Insurance and think that your car insurance policy lapsed or is going to lapse, act now before it’s too late.  

 

 

What to do if your car insurance lapses? 

 

If your auto insurance lapses, here is a list of what your next steps need to be:  

 

  1. Contact your insurance agent – First you need to find out what happened if your car insurance lapsed. You may have missed a payment or moved.  

  1. Ask if your policy can be reinstated as soon as possible – If you find out that the reason was because you missed a payment, contact your insurance agent today to see if you can pay the premium and get your car insurance policy reinstated as soon as possible.  

  1. Check out Indiana Farm Bureau Insurance – If your current insurance company is denying the reinstatement of your current policy, it may be time to switch insurance companies. Start by either requesting a free quote online or contacting a local insurance agent today.  

 

Do not get caught in a car insurance lapse. Make sure you pay your premiums on time and if you do find yourself without insurance during a brief period don’t drive because the consequences can be severe.  

 

If you are insured by Indiana Farm Bureau Insurance and would like to double check when your next premium payments are due, access your account online or contact your local insurance agent today.  

 

 

FAQs:  

 

Here are a few frequently asked questions (FAQs) regarding car insurance lapses. If you don’t see your question below learn more on our FAQ page.  

 

How long does car insurance lapse information stay on your driving record?  

 

Generally, companies look back through the last 12 months to see if you have had your insurance active. This length of time can fluctuate from insurance company to insurance company.  

 

What if I get into an accident after a lapse in my coverage?  

 

If your policy lapses and you get into a car accident while driving your car, you will more than likely not have insurance coverage. If you don’t have insurance coverage during that period of time it could end in a very negative impact on you and your finances. 

 

How to get car insurance online?  

 

The easiest way to get car insurance at Indiana Farm Bureau Insurance is by requesting a free quote online today. Once you request a quote one of our trusted local insurance agents will reach out and begin the process with you.