8 Best Auto Insurance Companies That Don’t Penalize for a Lapse in Coverage (2024)

A lapse in auto insurance coverage is a timeframe of between 30 and 60 days in which you don’t have insurance coverage. Lapses happen due to expired policies, missed payments, or other reasons.

When you reinstate your auto insurance after a lapse in coverage, most insurers increase rates because driving without insurance is a high-risk behavior. Enter your ZIP code above to search for cheaper rates from top providers.

#1 – Geico: Top Pick Overall

Pros

• Flexible Policies: Geico is known for offering policies with flexibility, accommodating customers even if they have experienced car insurance lapse. You can learn more in our Geico auto insurance review. 
• Discounts: Geico provides various discounts, offering potential savings for customers with a lapse in coverage, making Geico the best car insurance after lapse in coverage and the cheapest auto insurance for lapse in coverage.
• Online Tools: Geico’s online tools and mobile app facilitate easy management of policies, which can be helpful for those re-establishing coverage.

Cons

• Limited Agent Interaction: Geico is primarily known for online services, and some customers may find limited in-person interaction with agents if they prefer a more traditional approach.
• Claim Handling Time: Some customers have reported that Geico’s claim handling time may be longer compared to other insurers.

#2 – Progressive: Runner Up

Pros

• Snapshot Program: Progressive’s Snapshot program allows drivers to save based on their current driving habits, which can benefit those re-entering the insurance market. You can learn more about Progressive’s Snapshot program in our Progressive auto insurance review. 
• Name Your Price Tool: The Name Your Price Tool helps customers find a policy that fits their budget, especially useful for those seeking cheap auto insurance lapsed coverage.
• Wide Coverage Options: Progressive provides a variety of coverage options, allowing individuals to tailor their policies.

Cons

• Rate Increases: While they may not penalize for lapses, Progressive’s rates can increase for various reasons, impacting the overall cost.
• Rate Comparisons: While Progressive offers competitive rates, it’s essential for customers to regularly compare quotes, as rates can vary based on individual circumstances.

#3 – State Farm: Best for Drive Safe & Save Program

Pros

• Drive Safe & Save Program: State Farm’s Drive Safe & Save program rewards safe driving habits with discounts, which can benefit those with a lapse in coverage seeking lower rates. You can learn more about State Farm’s Drive Safe & Save program in our State Farm auto insurance review. 
• Extensive Agent Network: State Farm’s extensive agent network allows for personalized assistance, helping individuals navigate coverage options after lapse in car insurance.
• Steady Rates: State Farm is known for maintaining relatively stable rates over time, providing consistency for customers returning to coverage.

Cons

• May Vary by Location: Policies and regulations regarding lapses in coverage may vary by location.
• Less Flexibility for High-Risk Drivers: State Farm may be less forgiving for high-risk drivers, and those with a history of accidents or violations might find higher premiums.

#4 – Allstate: Best for Drivewise Program

Pros

• Drivewise Program: Allstate’s Drivewise program rewards safe driving with discounts, offering a potential advantage for those aiming to demonstrate responsible driving post-lapse. You can learn more about Allstate’s Drivewise program in our Allstate auto insurance review. 
• Claim Satisfaction Guarantee: Allstate’s Claim Satisfaction Guarantee underscores their commitment to customer service, which may be reassuring for individuals re-entering the insurance market.
• Multiple Discounts: Allstate provides various discounts that can help customers save on their premiums, including those with lapses in coverage.

Cons

• Premium Costs: Allstate’s premiums can be relatively high compared to some other insurers, impacting the affordability for those seeking coverage after a lapse.
• Optional Coverages Can Be Costly: While Allstate provides various coverage options, some optional coverages can significantly increase the overall premium.

#5 – USAA: Best for Military Members

Pros

• Military Discounts: USAA offers discounts for military members and their families, providing cost savings for a specific group of customers. You can learn more about USAA’s discounts in our USAA auto insurance review. 
• Customer Satisfaction: USAA consistently receives high marks for customer satisfaction, which is beneficial for individuals seeking a smooth re-entry into coverage.
• Financial Strength: USAA’s financial stability adds reliability for customers looking to re-establish coverage.

Cons

• Limited Eligibility: USAA membership is limited to military members and their families, excluding a portion of potential customers.
• Limited Physical Presence: USAA is primarily online or over the phone, and individuals who prefer face-to-face interactions with agents might find this limiting.

#6 – Liberty Mutual: Best for Customizable Policies

Pros

• Customizable Policies: Liberty Mutual allows customers to tailor their policies, providing flexibility for individuals with unique coverage needs post-lapse. You can learn more in our Liberty Mutual auto insurance review. 
• New Car Replacement: Liberty Mutual offers new car replacement coverage for qualifying vehicles, a valuable feature for those considering a new purchase after a lapse.
• Online Tools: Liberty Mutual’s online tools make it convenient for customers to manage their policies, particularly useful for those seeking a streamlined process post-lapse.

Cons

• Premiums: The cost of coverage with Liberty Mutual can be relatively high, impacting the affordability for those re-entering the insurance market.
• Complex Claims Process: Some customers have reported that Liberty Mutual’s claims process can be more complex compared to other insurers, potentially causing delays for those in need of prompt coverage.

#7 – Nationwide: Best for Vanishing Deductible

Pros

• Vanishing Deductible: Nationwide’s vanishing deductible program can help lower deductibles over time, providing an incentive for responsible driving post-lapse. You can learn more about Nationwide’s vanishing deductible program in our Nationwide auto insurance review. 
• Plenti Rewards Program: Nationwide offers rewards through the Plenti program, potentially providing cost savings for customers seeking affordable coverage.
• On Your Side Review: Nationwide’s annual policy review helps ensure customers have the coverage they need, a valuable service for those reassessing their needs after a lapse.

Cons

• Customer Service: Some reviews suggest that Nationwide’s customer service may not be as responsive as desired, which could impact the experience for those seeking assistance after a lapse.
• Policy Cancellation Fees: Nationwide may charge fees for canceling policies, so customers should be aware of potential costs if they need to switch insurers.

#8 – Farmers: Best for Bundling Discounts

Pros

• Bundling Discounts: Farmers offers discounts for bundling multiple policies, providing potential cost savings for those seeking coverage for multiple vehicles or additional insurance needs, making Farmers an excellent choice for car insurance for lapsed coverage. You can learn more in our Farmers auto insurance review. 
• Signal Program: Farmers Signal program rewards safe driving habits with discounts, offering an opportunity for lower rates for responsible driving post-lapse.
• Claims Satisfaction: Farmers has a reputation for good claims satisfaction, which can be reassuring for those re-entering the insurance market.

Cons

• Policy Costs: Farmers’ premiums may be higher compared to some competitors, impacting the affordability for those re-establishing coverage.
• Limited Availability: Farmers may not be available in all states, limiting its accessibility for potential customers in certain regions.

Companies That Don’t Charge You After a Lapse in Coverage

Unfortunately, auto insurance companies that do charge you for a lapse in coverage are much more common than those that do not. Most (if not all) companies charge you after a lapse in coverage because of the increase in your perceived risk.

However, this grace period depends on the company, where you live (state law can dictate how long the grace period is, what qualifies, etc.), the reason for the lapse in coverage, how long your coverage has lapsed, and your personal history with the company.

Best Auto Insurance Companies Monthly Rates That Don't Penalize For a Lapse in Coverage

By contrast, while companies like Safe Auto and The General may still penalize you for a lapse in coverage, they focus specifically on insuring high-risk drivers and, as a result, sometimes offer better rates than companies focusing on more standard insurance needs.

Learn More: Best Auto Insurance Companies That Don’t Charge Late Fees

While you may not be using your car frequently, acquiring car insurance after a period without coverage could result in long-term expenses.

Here’s how it all works. The worst-case scenario would be if you forgot to renew your policy or make regular payments and then got into an accident that was your fault and had no coverage.

Understanding the Meaning of a Lapse in Coverage

Any time you have a registered car but no auto insurance, that is considered a lapse in coverage. Any time you go without auto insurance, even for a single day, is considered a lapse. Some insurers, though, might not penalize you for a brief lapse of fewer than two weeks. 

You might experience a lapse for several reasons:

• Your policy expired
• Your policy was canceled because you missed a payment
• You stopped driving
• You were deployed on active-duty military service

The best thing you can do is work with your insurance company to avoid a lapse in auto coverage.

Whether your plan has expired or you haven’t set one up yet, you should never drive without auto insurance, as it’s illegal in every state except for New Hampshire.

Call your insurance provider as soon as you suspect you will miss or have already missed a car insurance payment. Doing so informs them of the circumstance and helps them determine what to do next. The options you have will depend on how long it has been since you have paid your auto insurance bill in full, the policies of your insurance provider, and the regulations in your state. 

Read More: Auto Insurance Premium Defined

But regardless of the specifics of your circumstance, you must get in touch with your insurance provider to work out a solution. Ignoring or postponing the problem will only make it worse. 

The Consequences of Having a Lapse in Auto Insurance

Driving without auto insurance can result in penalties that range from simple warnings to steep fines and even jail time. Penalties can be extremely harsh for repeat offenders and in extreme circumstances.  

Every time your auto insurance expires, it may have a potentially negative effect on your driving record. How long your insurance was inactive for and whether your prior policy was canceled or simply not renewed will determine how long the lapse is reflected on your record.

For at least six months after reinstating their insurance policy or obtaining a new one, car owners who have experienced a lapse in coverage typically pay higher rates. 

If you don’t have insurance for a while, your monthly rate could go up by about 25%, but the standard increase depends on your plan, provider, and personal circumstances. In some cases, it could go up even more. 

However, if your new insurance policy goes into effect without a hitch and your credit and driving records are clean, your offered rate might eventually drop to what it was before.

Except for New Hampshire, all U.S. states prohibit driving without insurance.

If you need car insurance after lapse in coverage, you might need to file an SR-22 with your state for three years to demonstrate that you have at least the minimum amount of required auto insurance. You can learn more about minimum auto insurance requirements by state in our guide. 

Penalties for Driving Without Auto Insurance by State

Even if you have a clean driving record, a coverage gap could cause insurance companies to view you as a high-risk driver. 

It might also affect how much you pay for auto insurance in the future. Maintaining continuous coverage is one of the best ways to get the best car insurance rate and ensure you are covered in case of an accident.

How Insurers Find Out if Your Insurance Lapses

To keep up-to-date databases of who has auto insurance and when they have it, car insurers collaborate with state DMVs. Therefore, even though you might be able to get a lower quote by lying about having a lapse in insurance, your insurer will eventually find out.

You are personally responsible for the damages if your auto insurance expires and you were involved in an accident. You must pay for your damages out of pocket even though the insurance policy could have covered your losses. 

Additionally, if the opposing party has a claim against you, they might look to your personal assets rather than the insurance policy for payment. However, the conventional laws of car accident fault and liability continue to apply even if your auto insurance expires and you are involved in an accident. 

You can contest your liability for the accident and even make a third party compensate you. 

The Bottom Line on Auto Insurance Lapses

Allowing your insurance policy to lapse due to nonpayment, even if you’re not actively operating a motor vehicle, can increase your insurance premiums if you decide to get car insurance in the future. Experts advise not to allow insurance lapses if you can help it.

If you’ve been without auto insurance for a year, explore the options available for auto insurance for lapsed coverage near you. Enter your ZIP code below to get started on comparing quotes.