Yes. First, let's talk about what constitutes a lapse. A lapse in coverage typically occurs when a policyholder fails to pay their premium on time, or by the cancellation date. Typically, if a payment hasn't been received by the due date, the car insurance company will wait for the payment for 2-4 weeks after the bill is due before cancelling the driver's coverage for non-payment.
If you do not pay your car insurance on time and your policy is cancelled this is called a lapse. Many auto insurance companies will raise your rates if you experience a lapse in coverage. Not only that, but many companies offer a discount for having continuous coverage for a specific amount of time. If you experience a lapse, you may not be eligible for this discount.
The Department of Motor Vehicles in most states also requires you to have continuous coverage. If you experience a lapse in coverage you might just receive a fine by your DMV and/or your vehicle's registration may be revoked.
The good news is many car insurance companies offer different payment options for their customers. Ask about paying your premium as a lump sum or having your payment deducted from your bank account each month automatically. These payment options may make you eligible for a discount as well.
Have other questions about auto insurance or how to get started? Want to speak with one of our licensed agents? Give us a call at 1-877-763-6862 and let us get started on your quote today!
