When you have a registered vehicle, but do not have insurance for a period of time, that period of time is called a “lapse.” A lapse in coverage may be caused by a number of reasons:
Regardless of whether your lapse was intentional or accidental, there are significant financial consequences. After a lapse of less than 30 days, you can expect to see your rates increase by 8%. If the lapse lasts longer, the increase could reach 35%.
The reason for these increases is due to the high risk nature of insurance lapses. All of the reasons for a lapse are seen as high risk behaviours. For example, not paying premiums on time makes you appear less reliable. Even voluntary lapses where you do not drive your vehicle at all, mean that you have less practise driving.
For the same reasons, it may be harder to purchase new coverage after a lapse as some companies will not want to insure you.
Free Car Insurance Comparison - Save up to 30%
No junk mail. No spam calls. Free quotes.
No Signup required
You may be getting worried while reading about the consequences of insurance lapses. But there is a grace period for missed payments. Your insurance provider is legally required to give you a notice before they drop your coverage.
The grace period will typically last between 10 and 20 days depending on your provider. As long as you make the payments within this period, your policy will not lapse.
Free Car Insurance Comparison - Save up to 30%
No junk mail. No spam calls. Free quotes.
No Signup required
Margaret Huntley Margaret Huntley is a creative writing and philosophy student at Western University. She has been working as a freelance writer for over two years and has written about everything from insurance, to poker, to health and wellness for international businesses.
