Life can get in the way of important deadlines – even your car insurance payments. If you’ve heard the term “car insurance grace period” thrown around, it typically refers to one of two things: making premium payments on time or getting car insurance for a new vehicle.
In both cases, you never want to drive without an auto insurance policy, whether your plan has lapsed or you have yet to set it up. In this guide, we’ll outline the typical length of a car insurance grace period and how many times you can take advantage of your plan’s flexibility.
Understanding a company’s car insurance grace period may also be a selling point when choosing a new provider. We’ll outline some of today’s best car insurance providers, so you know the right circumstance for you. Enter your zip code below or call (844) 246-8209 to start collecting quotes.
In This Article:
- What Is A Car Insurance Grace Period?
- How Long Is A Car Insurance Grace Period?
- What Is A Grace Periods When Buying A New Car?
- What Are The Dangers Of Letting Your Auto Insurance Lapse?
- What Happens If You Have A Car Accident During A Grace Period?
- Our Recommendations For A Car Insurance Grace Period
- Frequently Asked Questions
What Is A Car Insurance Grace Period?
A car insurance grace period is the amount of time your insurer or your state laws allow you to either delay paying for your car insurance premium without a lapse in coverage, or the time between purchasing a new car and auto insurance for that vehicle.
Let's say you have a difficult month or you simply forget to pay your premium. Will the company cancel your plan if you don’t pay your car insurance right on time?
It depends. Both individual policies and state laws set specific regulations on how long you can delay payment before your car insurance coverage is canceled.
In some cases, your car insurance company is allowed to cancel your plan after one day without payment, and your plan will lapse because of a non-payment, leaving you uninsured. You may be able to pay a fee to reinstate your plan immediately.
If you currently have auto insurance on a car, you typically have a grace period of seven to thirty days before you have to report your new car to your insurance company with or without a penalty.
State Laws On Auto Policy Grace Periods
Some states require car insurance companies to provide a written letter with the intent to cancel your plan before doing so. In short, it all comes down to your policy and your state laws.
When reading through state laws on car insurance policies, look for grace period and cancellation regulations.
Some states require companies to give you 10 to 20 days to get back on track with payments. In other cases, such as in Wisconsin, car insurance companies can cancel your plan the moment you miss your due date.
Do All Carriers Offer A Car Insurance Grace Period?
In short, no, but many have car insurance grace periods to remain competitive, so it's important to talk to an insurance agent about plan details. Some companies may even also allow a specific number of late payments before enforcing stricter regulations – such as if you’re late on your payments three months in a row.
Other companies may charge a late fee or set a higher premium the next time you renew your auto insurance.
Most companies do not want to lose you as a customer over one late payment. However, since car insurance plans are based on trust, be sure to do your due diligence to alert your company of any complications.
How Long Is A Car Insurance Grace Period?
As we mentioned, grace periods vary between 24 hours to a month – quite a large range. State car insurance laws also come into play if your plan lapses.
All but two states (New Hampshire and Virginia) require some form of car insurance at all times, and even those require confirmation to drive without insurance from the DMV. So, in a nutshell, you can’t simply jump in a car without insurance documentation.
The specific length of a grace period and steps that must be taken before a lapse in coverage come down to your location and your plan. If possible, get this information in writing from your company before you face late payments or create a gap in your coverage.
Can You Use The Grace Period Every Month?
Typically, car insurance companies place limits on how many times they will accept late payments. If your company has no limits on how many times you can take advantage of your grace period, it’s still not a great idea to depend on this safety net.
Many providers charge late fees or raise premiums when your contract renews, significantly adding to your overall insurance rates in the long run.
What Is A Grace Period When Buying A New Car?
So, what about car insurance grace periods when you’re adding a new car to your policy or buying a car without an existing plan? There are three things that come into play in this case:
- The rules of the car dealer
- Your state auto insurance laws
- Your car insurance provider
For example, some companies will allow you to drive off the lot with your new car if you have insurance for another vehicle. As long as you call the auto insurance company within a specific number of days – typically up to 30 – to order new coverage, you may be covered under the existing plan.
However, many car dealerships simply require a driver's license and proof of insurance to buy a car. In this case, what the dealer says goes.
Above all else, you should also consult state laws about car insurance grace periods. Some states may allow you to extend your current coverage from another vehicle to the new car for several days.
If you do not have any form of insurance in a state that requires coverage, you typically need to purchase a new policy before you drive for the first time.
Be aware that even if your state, dealership, and car insurance company allow a grace period, it’s helpful to get the grace period details in writing before you drive away from the dealer. If you get pulled over or are involved in an accident during this time, it will be easier to prove grace period regulations to the police.
Buying A Car From A Private Seller
Even if you purchase a used or new car from a private seller, you must follow state laws and policy regulations before driving home.
We also recommend taking care when you test drive a car from a private dealer. Ask the seller to show proof of insurance before your loop around the block to avoid breaking the law.
Take a look at your state’s required insurance minimums when checking the insurance in place, since there are still a significant number of drivers that slip by without the required amount.
What Happens If You Have A Car Accident During A Grace Period?
If you have collision coverage with a provider that offers a car insurance grace period, you are covered under your other car’s plan during this time.
For example, Progressive offers a 30-day grace period for new cars if you have a plan for another vehicle. If you get into an accident during these 30 days, your other car's plan will cover you up to the purchased maximums of that plan.
Keep in mind that costs on your new car could be higher than those from your old car, so it’s important to get your new plan rolling as soon as you can.
What Are The Dangers Of Letting Your Auto Insurance Lapse?
If your coverage lapses due to missed payment or a delay after you purchase a new car, how long can you be without car insurance? It’s important to stay off the roads until you can pay your balance or set up a plan. Penalties for not having liability coverage increase the longer you’ve driven without it.
Getting into an accident can cost tens of thousands of dollars for you and the other person involved if you do not have active auto insurance in place. In addition to these large expenses, there are also legal consequences for driving without insurance based on state laws.
Depending on where the accident occurred, you could face:
- License points
- License and registration suspension
- Vehicle impounding
- Jail time
- Restrictions on car insurance in the future
Many companies offer same-day or next-day car insurance, so be sure you have a plan in place and proof of insurance before you get behind the wheel of a car.
What Should You Do If You Miss A Car Insurance Payment?
Let’s say things aren’t quite lining up this month, and you know you’ll be two to three days behind on your payment. We recommend starting with these two steps:
- Look at your policy for specifications on missed payments.
- Check state laws on car insurance grace periods on the local Department of Motor Vehicles website.
Though it’s important to pay your premium as quickly as possible, check how your grace period works to ease your worries about insurance lapses. Call your lender to alert them of the delay and confirm your findings if you are concerned.
If your car insurance does lapse, call your company as soon as possible to figure out how to reinstate your plan or buy a new plan.
You can also reassess your current policy limits. If full coverage is too expensive, you may be able to get by on minimum coverage to save some money for a while.
Our Recommendations For A Car Insurance Grace Period
In our industry review, we highlighted car insurance providers that put customers first – through comprehensive coverage plans, affordable rates, and assistance during the quotes and claims processes. High customer care ratings are also generally a sign that a company will be easy to work with in the event of a payment slip-up.
Here are a few top contenders for auto insurance. Enter your zip code or call (844) 246-8209 to start comparing free car insurance quotes in your area.
#1 Progressive: 4.5 Stars
As one of the largest providers in the country, Progressive addresses its car insurance grace period online. Though it does not specify the number of days, it does provide detailed instructions on how to handle missed payments. It also highlights that military members deployed overseas receive a discount even if insurance lapses while away.
Here are some other top things to know about Progressive:
- Received an A+ financial strength rating from AM Best
- Offers usage-based insurance through the Snapshot® program
- Does not offer the lowest rates in the country, but does offer many discounts for specific groups like students and safe drivers
Read more in our full review of Progressive insurance.
#2 Geico: 4.5 Stars
Geico is also very clear about its car insurance grace period. If you miss a payment, you will receive a notice clarifying how long you can delay your bill without plan cancellation. Overall, Geico is known as one of the most affordable and customer-focused car insurance companies in the country.
Here are some top things to know about Geico:
- Has nearly 14% of the United States auto insurance industry, according to the National Association of Insurance Commissioners
- Offered in all 50 states with some local offices
- Received a 77.59 out of 100 Reader Score from Consumer Reports
Read more in our full review of Geico insurance.
#3 State Farm: 4.5 Stars
State Farm doesn’t list its car insurance grace period length online. However, the company does allow you to combine your monthly payment plans with your other State Farm plans and offers billing reminders or automatic debit.
Here are some top things to know about State Farm:
- Offers extensive coverage, including perks like roadside assistance and rental car coverage
- Earned an A++ rating from AM Best, which is the highest rating possible
- Known for its large discounts for new drivers, students, and bundling plans
Read more in our full review of State Farm insurance.
We always recommend getting several auto insurance quotes before making a decision. In addition to your premium, be sure your company has a history of customer service. A strong service team can help you through tricky payment months or buying a new car.
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.
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