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Q

If I am late paying my insurance by two weeks does this mean my insurance has lapsed?


A

Generally, if you are late paying your auto insurance by two weeks your insurance has indeed lapsed. There are usually no grace periods for car insurance bills, so if your payment is not in on time, your policy usually lapses at 12:01 a.m. on the date stated on your renewal or insurance notice.

If your policy lapses and you no longer qualify for standard rates, find out more about non-standard auto insurance.

In some cases, there may be some wiggle room. State laws do differ, as do insurance companies' guidelines, on if there is a grace period between a due date and an insurance policy cancellation. In some states there may be a grace period or a number of days in which the company must give you notice of cancellation. For example, in New Jersey if your insurance company cancels your policy for non-payment you should receive a 15-day warning notice.

Most states require a notice of cancellation so many insurance providers include the notice as part of the payment notice or mailed bill, stating that if the payment is not paid before a certain date the policy will be cancelled.

Here's how it usually works: If the cancellation/bill has a due date of June 1, 205, for example, it will also list a time element, such as 12:01 a.m., meaning that at midnight, the day before, the policy will be cancelled if the payment is not made. Many companies have a toll-free number on the bill to call if you have billing question. Do not wait until the day of cancellation to call and get information or it may be too late.

To find out if your state has any laws on grace periods for late payments, check with your state insurance regulator. If the state does not have a law, then call your insurance company to get the details of its cancellation process.

If your insurance has lapsed then you should try to get it reinstated as soon as possible.You may wind up facing fees and penalties if your car insurance expires, and there's a good chance your car insurance rates will increase -- in some cases up to 247 percent, according to a CarInsurance.com analysis of rates.

In states where you are required to have car insurance as long as your car is registered, you will probably be charged a fee if your policy lapses on your registered car.

For example, in New York you aren't required to surrender your plates for a lapse of 90 days or shorter if you pay a civil penalty fine. But if the lapse exceeds 90 days, your driver's license will be suspended. If you do not surrender your plates to the DMV, it will suspend your registration and driver license indefinitely. To reinstate your driver license you must pay a fee of $25 when the suspension ends.

Another example: In Pennsylvania, if your car insurance has lapsed for more than 31 days, your vehicle's registration will be suspended for three months. If you are cited for driving the vehicle without insurance your license will be suspended for three months as well.


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