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Reviewed by Daniel Walker
Licensed Car Insurance Agent Daniel Walker

UPDATED: Oct 19, 2021

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The Short of It

  • The best auto insurance companies that accept lapses in coverage are USAA, GEICO, and State Farm
  • A coverage lapse is a period of time in which you did not have auto insurance
  • Some providers view people with an auto insurance gap in coverage as high-risk drivers and increase rates

A coverage lapse means you went without auto insurance for a period of time, and it usually causes your rates to increase. The top auto insurance companies that accept lapses in coverage are USAA, GEICO, and State Farm.

Keep reading to compare affordable auto insurance companies that accept lapses in coverage and discover how an auto insurance gap in coverage affects you.

After learning about auto insurance quotes from companies that accept lapses in coverage, remember to enter your ZIP code into our free tool above to receive rates from the best providers near you.

What are the best auto insurance companies that accept lapses in coverage?

There aren’t many affordable auto insurance companies that don’t accept lapses in coverage at all.

Auto insurance is legally required in most states, even for drivers who experienced a coverage lapse.

So rather than an actual application denial, you’ll usually receive very high, sometimes unrealistic quotes.

A lapse in your insurance history is viewed as a high-risk choice, and high-risk drivers pay 25%125% more for auto insurance than average.

Some experts compare coverage lapses to drivers without substantial driving and insurance histories, as your insurance history is interrupted during a lapse in coverage.

The table below compares the average annual auto insurance rates specifically for drivers with insubstantial insurance histories from the top companies that accept lapses in coverage.

Average Annual Auto Insurance Rates by Company
CompaniesAverage Annual Auto Insurance Rates
Liberty Mutual$6,009.52
State Farm$4,145.20
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According to our data, the best auto insurance company that accepts lapses in coverage without substantially increasing rates is USAA auto insurance company.

This company only services military personnel and their families but has a discount program to assist with pausing coverage if you’re deployed.

Though it has limited availability, USAA provides the cheapest quotes in almost every state.

Plus, the company offers lower base quotes to drivers who lack substantial insurance histories.

GEICO auto insurance company also offers some of the cheapest auto insurance for a lapse in coverage. While the rates are usually more expensive than those from USAA, everyone is eligible to use GEICO.

Plus, GEICO also offers insurance suspension programs for military members, similar to USAA.

State Farm auto insurance company also offers competitive quotes to drivers who lack substantial insurance histories, suggesting that this provider is kinder to people who’ve experienced coverage lapses.

But State Farm doesn’t offer as many discounts to drivers as GEICO and USAA.

Allstate auto insurance company is an auto insurance company that doesn’t accept lapses in coverage as readily as other companies.

Both Allstate and Liberty Mutual auto insurance company underwrite quotes for drivers with limited or no insurance histories at higher than average costs.

Ultimately, many different variables impact auto insurance costs beyond your insurance history.

For example, your age, driving record, and ZIP code also significantly affect your rates.

Plus, not every provider is available in every state. So if our top companies do not work for you, check out our honorable mentions:

Who should buy auto insurance from companies that don’t accept lapses in coverage? Anyone with a perfect driving record, continuous insurance coverage, and a low-risk, safe vehicle.

But to buy auto insurance from companies that accept lapses in coverage at affordable rates, compare quotes online from multiple providers and pick the cheapest policy option with the coverage you need.

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What is a lapse in auto insurance?

A lapse in auto insurance means you went for some time with no auto insurance policy in place. This lapse means you chose to drive uninsured or couldn’t responsibly pay your bills to insurance providers.

Both circumstances make you high risk to insure. So auto insurance after a lapse in coverage typically increases, even if the gap was only a single day.

However, the most significant rate increases happen when a registered car goes without auto insurance for 30 to 60 days.

What else makes you a high-risk driver besides a coverage lapse? Providers deem you high risk if you are a new driver, a teen, or a senior driver.

You’re also considered high risk if you have bad credit, too many at-fault accidents, or lots of minor traffic violations, like speeding tickets.

What can cause a lapse in auto insurance? Take a look at the most common causes:

  • Forgetting to renew your policy
  • Missing a monthly payment and not meeting your adjusted deadlines
  • Moving abroad and forgetting to pause your coverage
  • Deployment overseas for military services
  • Canceling a policy before a new one is in place

What is the effect of having a lapse in coverage on your auto insurance? You may see an increase in your insurance rates, a potential driver’s license suspension, and penalties from your state DMV.

Plus, without auto insurance, you’re not protected in any way if you get into a car accident.

According to the Insurance Information Institute (III), in 2019, the average bodily injury liability claim cost $18,417, which most people struggle to afford out of pocket.

If you’re in the military or are a student, you may have the option to pause or suspend your auto insurance, avoiding a coverage lapse.

For example, GEICO and USAA offer significant rate reductions for deployed military customers.

However, your options depend on what provider you use and the laws where you live.

Also, if you get into a car accident and realize your insurance coverage lapsed even just a day before, then you are still not protected by your policy, even if you get it reinstated. There may be exceptions, but these are incredibly rare.

However, if you don’t have insurance but did not cause the accident, the at-fault driver’s policy covers you. Contact the other driver’s insurance company to file a claim.

If the fault is questionable and you don’t have coverage, you will not have an adjuster on your side to fight for you, which means you may be stuck with the bills yourself. Pursue legal counsel for more advice.

If you cause an accident and your insurance lapsed, then you’re responsible for paying for all damages yourself.

You may also face legal action and even have your assets seized if you cannot afford to pay.

If you keep receiving auto insurance rates from companies that don’t accept lapses in coverage affordably, compare quotes from different insurers and ask about additional discounts.

Is there a grace period after an auto insurance coverage lapse?

Potential coverage lapse grace periods heavily depend on what provider you use and why you experienced a coverage lapse.

For example, if you missed a payment, most providers give you up to 30 days to make up for it with no penalties.

So, technically, you get a 30-day grace period before your failure to pay becomes a coverage lapse.

Similarly, suppose your policy expired by only a day or so, and you forgot to renew it.

In that case, most companies allow you to reinstate the policy without charging you for any lapses. But in both cases, you’re subject to possible fees.

However, if you committed a dangerous traffic violation and your provider chooses to terminate your coverage, then you’ll have until whatever date your insurer gives you to secure a new policy.

Your provider cannot suddenly cancel your policy without notice. Legally, the company must mail you a letter with the cancellation date marked and a reason for the termination.

Auto Insurance Companies That Accept Lapses in Coverage: The Bottom Line

Even if you experienced an auto insurance coverage lapse, you still need to secure a policy to drive in most states legally.

If you’re only receiving auto insurance quotes from companies that don’t accept lapses in coverage at affordable rates, do some comparison shopping using an online quote tool, and ask about additional discounts you might earn.

Other ways to save money on insurance after a coverage lapse include lowering your deductibles, adjusting your coverage levels, and driving a safer car with good ratings and insurance loss ratios.

Now that you’ve compared auto insurance rates from companies that accept lapses in coverage, compare costs from the best providers near you by entering your ZIP code into our free quote tool below.