Paying your car insurance premium on time is important. Missing payments can lead to fees, or worse, a canceled policy. 

Fortunately, most car insurance companies offer grace periods for late payments. This is the amount of time after a payment due date that your car insurance company will accept a payment before canceling your policy. 

There are two types of grace periods we can talk about when it comes to car insurance. One refers to how long you have to insure a new vehicle after purchasing it—that’s not what this article is about. In this post, we will focus on car insurance payment grace periods. This means the rules, penalties, and solutions when you can’t pay your car insurance premium on time. 

If you’re delaying a payment because your premium is too high, it could be time to start shopping around for a new insurance policy. Comparing car insurance quotes with Insurify is a great way to find car insurance savings. 

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What is an insurance grace period?

An insurance grace period is the amount of time you have after a car insurance payment due date to pay your premium. The length of a grace period depends on your insurance company, but you’ll usually get a 1- to 30-day grace period. If you think you’re going to be late on a payment, make sure to check with your insurance company to find out exactly what the grace period for your policy is.

If you make a payment within your grace period, you may still have late fees to pay, but at least you won’t face a lapse in insurance coverage. Driving without an active insurance policy could lead to a license suspension. 

Penalties for Not Paying Car Insurance 

You may face penalties for late payments made before the final grace period deadline. Late payments usually result in a late fee, and you could also see higher premiums when it comes time to renew your policy. 

If you don’t pay your premium within your grace period, it is considered a nonpayment of your premium. This means that your policy can be canceled by your insurance company, leading to a lapse in coverage. 

An insurance lapse is no joke. Not only are you legally required to carry insurance on a vehicle you’re driving, but you also put yourself at risk when you drive with a lapsed insurance policy. Not only will you be responsible for any costs following a car accident, but you could face other legal consequences for driving uninsured

If Your Car Insurance Has Lapsed

Once the grace period deadline passes, your insurer will probably cancel your policy. This means that your vehicle is no longer insured, and you will be responsible for any expenses that result from a car accident

It may be possible to reinstate your auto insurance policy with your insurer. Each company’s process may vary, but generally speaking, the minimum requirement would be to pay any late fees and past-due premiums, plus a reinstatement fee. 

Even after all that, you may still end up with a lapse in your coverage. This is because car insurance providers usually reinstate your car insurance with a new effective date after you’re all caught up on your payments. But if you were already considered a high-risk driver, this process may not be easy, or even possible. 

It’s more than just extra fees you might have to deal with, though. Policyholders who let their car insurance policies lapse may be considered high-risk drivers in the future, leading to higher premiums down the line. It’s also important not to drive your vehicle if your car insurance has lapsed. Driving without insurance is illegal, and you could actually have your driver’s license suspended if you’re caught driving while uninsured.  

Ways to Reduce Your Car Insurance Payments

Car insurance can be a major expense, and it’s not always easy to keep up with payments. But letting your coverage lapse can be even more expensive. Luckily, the premium you currently pay doesn’t have to stay the same. So if your car insurance rates have become unaffordable to you, here are a few ways to cut costs without sacrificing the coverage you really need.  

Increase Your Deductible 

Increasing your insurance deductible is one option to reduce your car insurance premium. The deductible is the amount you would pay for covered repairs before your insurance company pays for the rest. That’s why if you have a higher deductible, your premium decreases. 

Just make sure you have a plan for paying your deductible if you ever get into an accident. Not being able to pay for your deductible can make it hard to get your car repaired after a covered incident and make an already stressful situation worse.  

Remove Unnecessary Add-ons

Car insurance comes with a lot of options that add up to what many people consider to be full coverage car insurance. But full coverage may not always be necessary. You should always carry the minimum insurance coverage required by your state laws, but after that, it’s worth considering alternative coverage options to cut costs on your current policy. 

Some common coverages you might be able to get by without: 

  • Roadside assistance: It’s not just your insurance company that can offer you roadside assistance. You might already be paying for a service like AAA or have benefits through a household member. Maybe you just don’t make long car trips often enough to be worried about getting stuck on the side of the road far from home. If you have the resources to figure out a flat tire or empty gas tank on your own, you could probably go without this add-on. 
  • Rental car coverage: If your car needed repairs, would you really need a rental car? You might get rental car assistance through a credit card benefit, or maybe you have access to a second car to get around for a few days if your car is ever in the shop. If you have a reasonable way to access a vehicle or other transportation (think Uber or public transit) while your car is in the shop, rental car coverage may not even be necessary. Removing it can save you on your premium. 
  • Collision or comprehensive coverage: Forgoing this type of coverage could make sense for some drivers of older vehicles. The reason is this: If your car is totaled in an accident, your insurance company only pays for the current value of the vehicle, minus your deductible. If you’re driving a new car with high blue book value, this coverage helps you recoup some of the money lost in damages. 

Remember, these are just suggestions. Make sure you have a plan for covering expenses if you do decide to drop any of these add-on coverages. 

Qualify for New Discounts 

Some car insurance discounts come after you meet certain requirements. Check with your car insurance company to learn which discounts could be available to you currently or which ones you might qualify for with simple changes. You might be able to bundle insurance policies with other drivers in your household or enlist in a defensive driving course to get a discount. And if you find yourself driving less than usual these days, it could be worth checking out low-mileage discounts too. 

Compare Quotes for a Better Rate 

If you’re struggling to make your premium payments on time because of the cost of your insurance, it’s probably time to compare quotes and look for a new policy. Comparing personalized quotes with Insurify helps you find car insurance policies that fit your budget by finding all the discounts and deals you qualify for based on your profile. Plus, it’s free to look. 

Frequently Asked Questions

What is a car insurance grace period?

A car insurance grace period is the time you have to make a payment on your premium after the due date has passed. Grace periods vary from company to company but can last anywhere from 1 to 30 days in most cases. If you fail to make a payment by the end of the grace period, your insurance provider can cancel your car insurance coverage.

How long is the car insurance grace period for payments?

Car insurance grace periods for payments can vary from company to company. While 10 days is considered a standard grace period, it’s best to check with your auto insurance company to learn how long your grace period is.

Am I still covered if I get into an accident during my car insurance policy’s grace period?

Since car insurance grace periods are intended to give you one last chance to keep your policy intact, you would still be covered if you got into an accident during the grace period. However, you’d still need to make a payment before the deadline to be able to use your policy.

Updated September 11, 2020

Mandie Kelleher is a freelance content writer for financial services and personal finance. With a background in financial administration, and teaching, she crafts content that deepens her readers' understanding by making complex topics simple. You can learn more about Mandie by visiting her site,