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Car Insurance Grace Periods: What You Need to Know (Updated 2022 August)

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Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.
Katie Powers

By: Katie Powers

Edited by Jackie Cohen

Last Updated June 15, 2022

A car insurance grace period describes the time between a policyholder missing a payment and the insurance company canceling the policy entirely. Though this phrasing can also describe the new car insurance grace period for insuring a new vehicle, this specific page only focuses on the time frame customers have to complete a late car insurance payment.

For some, making auto insurance payments in a timely manner causes financial strain. If you struggle with affording your existing policy, it may be time to find a new policy at a cheaper rate. With the Insurify car insurance comparison tool, users compare dozens of monthly quotes from top insurance providers. More options lead to more specialized and affordable coverage.

Quick Facts

  • Companies typically cancel customer policies after the insurance payment grace period.
  • People with clean driving records pay less on insurance and earn good driver discounts.
  • Many insurance providers offer discounts to those who bundle home and auto policies.

What is an insurance grace period?

What is a car insurance grace period?

A grace period may allow policyholders an extension to pay their insurance premium late before their coverage lapses.

The amount of time between when a policyholder’s car insurance premium payment is due and when an insurance provider cancels the policy is called an insurance grace period. Though internal policies vary by each insurance company, policyholders typically have a 1- to 30-day grace period to complete a late insurance payment. Check with your provider for specifics.

If you miss a payment while waiting for your next paycheck or accidentally forget, immediately check the policy of your insurance provider to see how long you have to complete your payment. Though late payments typically result in late fees, they cost less than the complications and license suspension associated with a full lapse in car insurance coverage.

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Penalties for Not Paying Car Insurance

Making late payments on an auto insurance policy almost always results in penalties that range in severity. Even if you complete the payment prior to the end of the grace period deadline, late payments typically trigger additional late fees. Some car insurance companies even raise overall insurance rates for policyholders with a record of one or more late policy payments.

Failure to make a late payment within an insurance company’s allotted grace period is seen as nonpayment, which allows the car insurance company to cancel the customer’s current policy. The resulting coverage lapse has serious legal and financial implications for those who choose to illegally drive without proof of insurance—especially in the event of a car accident or violation.

See More: Best Car Insurance Companies

What happens if your car insurance has lapsed?

People who lose their policies due to missing their grace period deadline qualify as uninsured drivers. This means any previous coverage associated with their vehicle no longer applies or protects them in the event of an accident or driving violation. Uninsured drivers face financial and legal responsibility for any car accident they’re involved in.

The expenses for uninsured drivers rack up fairly quickly, so the situation should be avoided at all costs. In some cases, policyholders with canceled policies can reinstate their auto insurance coverage with the help of their insurance agent or another insurance company representative. At the very least, this would require catching up on past premium payments and additional fees.

Higher Premiums for Drivers without a Previous Insurance Policy or with Lapsed Coverage

Many insurers view those with previously lapsed insurance policies as high-risk drivers and charge them higher premiums. Drivers without former coverage typically pay more for coverage, whether it’s full coverage or the bare minimum state insurance requirements. View the table below to compare monthly average premiums based on proof of prior auto coverage.

Prior Coverage?Average Monthly CostCoverage Type
Yes$153Minimum Liability Coverage
No$172Minimum Liability Coverage
Yes$288Full Coverage
No$326Full Coverage

Ways to Prevent Lapsed Insurance and Late Insurance Payments

To prevent an insurance coverage lapse or frequent late payment fees, find ways to reduce your overall auto insurance rates. In addition to shopping around for the best rates with the Insurify car insurance comparison tool, customers can shave down costs in the three following ways: increasing their deductible, removing unnecessary add-ons, and qualifying for new discounts.

Increase Your Deductible

Increasing your insurance deductible translates directly to decreases in premiums. Keep in mind that a deductible represents the amount of money you pay as a policyholder for auto repairs before your insurance company covers the remaining cost. Before making a change in your deductible, make sure the increased deductible is a feasible cost for you to potentially pay.

Remove Unnecessary Add-Ons

Legally, drivers only need the minimum insurance coverage dictated by their state. Policyholders with full-coverage plans looking to lower premium costs can consider removing some add-ons, including collision coverage, rental car coverage, roadside assistance, and more. More coverage provides more protection, so these decisions should be intentional and thought out.

Qualify for New Discounts

Due to the sheer volume of auto insurance discount options, you should regularly review your eligibility for the discounts offered by your insurance provider. Simple changes like the addition of a safety feature, bundling your auto policy with a homeowners policy or taking a driving course often result in some element of a discount that reduces overall insurance costs.

Finding the Cheapest Car Insurance

Whether you are insuring your first car, a used car, or a brand-new car or looking for a new policy for an old car, shopping around for a variety of monthly quotes is essential. Between stressors at the car dealership, long wait lines at the DMV, and deciding on the right coverage from the right insurance provider, dealing with a new car or an old one can cause a headache.

Once you decide on the right coverage for you—perhaps some combination of bodily injury and property damage liability insurance, home insurance bundling, personal injury protection, or something else entirely—compare car insurance quotes from dozens of the nation’s top providers with the Insurify car insurance comparison tool. Try it for yourself today to save big.

Frequently Asked Questions

  • A car insurance grace period refers to the amount of time a person has to make a late payment before their insurance company cancels their car insurance policy. Customers typically have somewhere between 1 and 30 days to make their late payment. Though late payments result in fees from the insurance provider, these costs are less troublesome than lapsed auto coverage.

  • Customers typically have a 1- to 30-day car insurance payment grace period to complete a late payment. Ultimately, these grace periods vary by each insurance provider, meaning companies like Progressive, Allstate, GEICO, and State Farm have different policies in place in regard to late payments and lapsed coverage. Check with your specific insurance provider for their policy.

  • As long as you have not exceeded your insurance policy’s grace period, you will be eligible for your coverage in the event of an accident. A late payment will need to be filed prior to the end of the grace period deadline in order for this coverage to be applicable to your situation. If the grace period ends before you have made a payment, you will not have insurance coverage.

  • No one-size-fits-all policy plan exists for auto insurance customers due to specialized insurance needs and fluctuating insurance costs. By shopping around for insurance when taking out a new policy or renewing an old one, insurance customers find ways to save on insurance. With Insurify’s car insurance comparison tool, users easily compare dozens of monthly quotes.

Compare Car Insurance Quotes Instantly

  • Personalized quotes in 5 minutes or less
  • No signup required
  • Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.

Katie Powers
Katie Powers

Insurance Writer

Katie Powers is an insurance writer at Insurify with expertise in personal finance and auto insurance topics. She strives to help consumers make better financial decisions. Prior to joining Insurify, she completed her undergraduate and graduate degrees at Emerson College. Her work has been published in St. Louis Magazine, the Boston Globe, and elsewhere. Connect with Katie on LinkedIn.

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