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Is there a grace period for auto insurance lapses?

On Behalf of | May 17, 2022 | Insurance Defense |

Say that a driver has spent the last five years paying their car insurance on time every year. Unfortunately, they forget to pay during the sixth year, and then they get in an accident. They missed the payment date by only two days. It just slipped her mind, but now they’re worried that they’re not going to be covered.

If the insurance company claims that the coverage lapsed and so they don’t have to pay anything due to the accident, the customer may respond that they’re acting in bad faith by not providing any grace period.

But, is this true? Does the insurance company have to offer a grace period or let someone get caught up on their payments? Or are they just out of luck because they technically got in a car accident when they didn’t have coverage?

All insurance companies have their own regulations

The answer to this question really lies with the specific insurance policy itself. Insurance providers are allowed to provide a grace period if they would like to do so. This may even be different between different customers who have various types of plans. Some coverage plans may come with a grace period and others may not.

One thing that people are often thinking about when considering this question is how quickly they have to put a new car on their insurance. And the state does offer a grace period that may be as little as two days or as long as 30, depending on the case. But this doesn’t mean that the person is covered during that period. It just means that they can legally drive before getting insurance.

These types of disputes between drivers and car insurance companies can become very complicated, so it’s important for both sides to understand their options.


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