How Long Can You Be Without Car Insurance?

Car insurance is mandatory, but you do have an option between choosing a full coverage or a partial coverage option on the policy.

Legally, not even a minute. Practically, you do have a grace period.

Let me back it up a little; let’s start with the basics first.

What is Auto Insurance and how does it work?

Auto insurance is a policy that protects your car against financial blows from damage or theft. If a policyholder find themselves in a road accident, the insurance policy covers:

  • Personal bodily injury
  • Liability (damage you cause others)
  • Collision
  • Medical expenses
  • Comprehensive

For a full coverage, the charges are of course more, but there is a cheaper option for policyholders to go for a partial coverage option. Insurance policy premiums are paid each month to keep the policy in force, and when the time comes, you can have the policy cover for your accident expenses.

Can you own a car without Insurance?

If you’re in New Hampshire state, then yes, you can own a car without insurance. For all the other states, you can’t drive a yard without having insurance. And if you’re caught doing so, your license could be confiscated and you’ll be having a hard time with cops.

Technically you can purchase a car without insurance, but you won’t be able to drive it, so the best way to go about it is to apply for insurance immediately. And if you don’t want to pay higher premiums, go for a partial coverage option.

Driving someone’s car without Insurance

The basic of how auto insurance works is that the vehicle is insured, not the driver. So if you were to drive someone’s car and they have insurance, the insurance company will pay the claim of the insured vehicle regardless of who the driver is.

There are two things that come into play when you’re driving someone’s car without insurance, or if they’re driving your car:

Permissive Use: This is when your car is being driven by people you’ve given permission to, or people you’ve listed with your policy who are allowed to drive your car. This is usually your spouse or your child or someone close in the family. However, according to some states and their policies, if someone from your family other than yourself is driving, there may be limited coverage allowed on your auto policy.

Non-Permissive Use: If your friends or family members use your car without your consent and run into an accident, you won’t be held accountable. If your friend has insurance, the damage will be covered through them. The problem will start when they don’t have insurance- that way you may or may not have the insurance company fill the expense.

How long can you drive without Insurance after buying a car?

If you’re buying your first car, you obviously don’t have auto insurance. And in many states it is illegal to drive your car without insurance. So much so, the car dealer may not give you the car until you’ve proven you have at least applied for insurance. So you must have insurance as soon as you’ve purchased a new car.

But if you already have insurance and you’re purchasing a new car, you get a grace period of 7 to 30 days during which you have to contact your insurance company and sign up your new car. Of course, if you miss that, there could be legal consequences for you.

There are penalties if you’re caught driving without insurance such as:

  • Ticket for not being insured starting from $100, and you could face higher premiums when you get the insurance reinstated because of this violation.
  • Driving license could be revoked, a 60-90 day suspension is actually very common.
  • Suspension of vehicle registration for up to 60-90 days. However in states like Texas, this could be dragged to upto a year or two.
  • Other monetary fines that often start from $100 and could go up to $500 depending upon the situation.

If your uninsured vehicle is sitting in the garage, that’s fine. As long as it is off the road. But as soon as you’re setting off for a drive, the legal radar is going to be on you; so it’s best to have your vehicle insured as soon as possible.

And why do you want to take a risk? Americans are some of the most reckless drivers, you probably can’t save yourself on the road but you can get away without paying for the losses! Sounds like a fair deal.

What happens if Auto Insurance Lapses?

Your auto insurance will lapse if you don’t pay your premiums on time; in simple words, the policy is cancelled and your car is no longer insured.

If you’ve accidentally missed your premium payment during a certain month, most insurance companies offer you a grace period of 10-20 days during which you have to pay your dues. However, some companies do NOT give you even a day’s leverage before they cancel your policy.

A lapse in auto insurance policy creates a negative impact on the borrower’s overall credit rating; this will affect when you’re going to apply for more insurance, student loans or even a mortgage.

Can a Lapsed Insurance Policy be Reinstated?

If you pay within your grace period time, great; your car is still insured under the policy. However if you miss the grace period limit again, your insurance will automatically be cancelled. This will make it harder and even more expensive for you to get car insurance after lapse in coverage, so make sure you don’t get to the point where your policy could lapse.

It is possible to have a lapsed policy reinstated, but there is added hassle and additional charges that you would definitely want to avoid.

If your policy lapsed a week or two before, you should immediately contact the insurance company and request them to revive your policy, of course you will have to pay a certain amount of fee for that to happen and maybe this time the premium amount will be higher. But if it has been a couple of months or a year that you have not been insured, chances are you will have to start from scratch.

Be prepared to go through the entire application process again. This time you can also shop around and look for another insurance company that may have a better package designed out for you.

Cheapest Auto Insurance for Lapse in Coverage

If you’ve had an insurance policy that has lapsed, there are chances you won’t find any cheap options. The best way to go about it is to shop around and look for cheap rates.

Minimum vs. full coverage average annual rates by company

Company Full coverage Minimum coverage Annual difference
Geico $1,198 $478 $720
State Farm $1,511 $624 $887
Progressive $1,766 $774 $992
Liberty Mutual $1,778 $900 $878
Allstate $1,834 $784 $1,050
Farmers $1,865 $926 $939

Conclusion

Technically, you can’t be without auto insurance, and why should you be? Auto insurance policies provide financial protection to you and your car, and in return ask for a small fee as premiums each month. It is never a bad deal, because the safety of you and your loved ones is always a priority. The trick is to never let your policy lapse and always pay your premiums on time.

Nabeel Ahmad

Nabeel Ahmad

Nabeel Ahmad is the founder and editor-in-chief of Insurance Noon. Apart from Insurance Noon, he is a serial entrepreneur, and has founded multiple successful companies in different industries.

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