What to do when your car insurance expires

What to do when your car insurance expires depends on your policy. Most companies automatically renew, and some offer a grace period when your car insurance expires.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you need to know...

  • If your car is registered, you need insurance for it
  • If your insurance is due to expire, make sure you get new coverage in place
  • Some insurers offer a grace period, but you need to check your own policy to see if yours does

Because every state in the U.S. requires you to carry car insurance or prove that you can be financially responsible after an accident if you are the cause of the accident, you need to have car insurance.

What happens when your car insurance expires? Can you renew your expired car insurance? When it comes time for your car insurance to expire, in most cases, you won’t have to do anything–most companies automatically renew your policy unless you object.

However, should your policy expire without a new policy coming into force, then you need to get new insurance immediately. What’s more, you cannot drive your vehicle until you have your new insurance policy.

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Many people do make the mistake of thinking that, if they aren’t driving their car, then they can let their car insurance lapse. However, every state requires registered vehicles to be insured.

When does car insurance expire on most policies?

Can you drive the day your insurance expires? It may be a good idea to make that calendar entry for the day before your policy expires, just to be sure. If a car insurance policy expires on a certain date, it expires at 12:01 AM or a minute past midnight of that date.

Although it is at the discretion of each insurance company, most give their policyholders a grace period after termination.

Every now and then it is necessary to lend your car to a friend or family member. So that you will not have to wait in distress, temporary insurance is available.

The borrower can obtain this policy or you can include temporary coverage on your policy. This rider inclusion may be purchased in daily increments. Short term policies are available for longer periods also.

Short term policies may be purchased for up to 28 days.

For some people, this type of policy saves them the obligation of paying for insurance when they are not driving. An example would be a college student who is driving their parent’s car for the summer.

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What to Do if You Are No Longer Driving Your Car

If you are no longer driving your vehicle, then, of course, you don’t want to maintain unnecessary insurance on it. However, you can’t just make the decision to stop paying for your insurance; there are things that you have to do to satisfy your state’s laws.

The first thing that you should do before canceling your insurance is to visit your state’s insurance department website. For instance, in North Carolina it is the Department of Insurance and in Florida it is the Florida Office of Insurance Regulation.

You may have to search for the office that applies to your state.

The reason that you want to do this is that you will want to find out where you need to go to turn in your license plates so that your car is no longer registered as an active vehicle.

In some states, you will find that your local DMV is the place to take your license plates. In other states, you must go to your state’s registration or licensing office to turn in your tags.

In most cases, you will not have to pay a fee to turn in your tags. However, you do have to pay a fee to reinstate your tags should you want to drive the vehicle again.

You will have to pay the same amount of money you did when you first registered your car, so keep that in mind when considering this as an option.

Vehicle registration can cost between $150 to $600 depending on where you live in the U.S. In most cases, if you know that you aren’t going to be driving your vehicle for a year or longer, then it is beneficial to turn in your tags and pay for them again later.

The Consequences of Not Carrying Car Insurance

Often, the reason that someone allows their insurance to expire is because they cannot afford the payments that they are making for their premiums.

The problem is, you can face serious fines if you get caught driving without insurance. In some states, you could even face jail time.

What’s more, if you cause an accident and you don’t have insurance, you are financially responsible for all of the damages caused by that accident. What’s worse, you can be sued if you can’t come up with the money to pay for damages.

In some states, if you don’t carry car insurance and you are in an accident that someone else has caused, their insurance won’t have to pay for your damages.

When Does Car Insurance Expire After Premium Due Date?

If your car insurance company extends a grace period to its policyholders, it is usually five to ten days at best. Many will disclose the company’s right to refuse to pay the claim should you be involved in an accident before your premium is received.

If your premium is received as agreed, they will make the policy retroactive to show continuous coverage. The benefit to you in this arrangement is the avoidance of a lapse in coverage.

Many insurance companies will charge a small late fee for late premiums. If your payment is late, they have the right to refuse your payment and cancel your policy. In turn, you also have the right to cancel your policy if you find a better rate.

If your policy is canceled or expires, you must make provisions under another policy immediately or park your car.

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What to Do if You Can’t Afford Your Car Insurance

If you cannot afford your car insurance, then you have a few options to consider:

  • The first option is for you to increase your deductible until your premiums are low enough for you to afford them.
  • The second option is for you to sell your car and buy one that you can afford to insure. If you are paying money to a lender and have to carry comprehensive and collision insurance, you are increasing your rates considerably.
  • Many states offer state-funded car insurance options. They aren’t the most affordable option in every case, but you should consider looking into this option.
  • The last option is for you to stop driving and take other forms of transportation. This may seem like an unlikely option, but if you have a bike, can take the bus, or can even walk to work, then you should consider this as an alternative

Of course, if you are paying a lot for your car insurance, then you need to compare prices with other car insurance companies to ensure that you aren’t paying more than you should.

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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