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What Happens With Your Car Insurance if You Don’t Have Money to Pay for It

what happens if you dont pay your car insurance

In these busy times, you cannot even think of being without a car. You need it for so many aspects of your life, making it almost like a necessity. Although buying a car is expensive, we all do it, but there are other expenses like gas, maintenance, and car insurance.

Even if you own a car, you can’t use it if you don’t have enough money to pay for gas. But most importantly, you cannot drive your car without car insurance.

Of course, some options exist for people who can’t afford car insurance. Insurance providers offer a range of discounts like safe driver and low mileage deductions. It is very important to choose your insurance provider wisely.

The main issue here is that you can not drive without car insurance, and it is illegal in most states. This is due mainly to the fact that a lot of people get injured in car accidents, and car insurance policies should cover medical costs and other damages. Learn about how MoneyZap can help you pay for your car insurance.

Car Insurance Premiums

What are car insurance premiums? They are monthly installments that you pay for your car insurance policy. The rate is determined according to some key considerations, including:

  • Driving history
  • Age
  • State of residency
  • Vehicle’s make and model
  • How often the car is driven

You can pay your car insurance rates by monthly debit order, in person, or by mailing a monthly check. You can also pay online or through mobile apps. Also, the provider offers certain discounts if you pay an annual fee instead of monthly installments.

What Is Going to Happen if You Do Not Pay Your Car Insurance?

Driving without car insurance is definitely not a good idea. Driving uninsured may save you some money but will cost you more in the long run. Some of the consequences of not paying your car insurance policy include the following:

  • Reminders – You will receive a reminder via text message or mail a few days after you miss the due date. Some providers may include a fee for late payment, so it is better to pay it immediately.
  • You Will Lose Your Coverage – If you miss one payment, you won’t be covered if something happens or you suffer damage. What does this mean? If you get involved in an accident or damage your car, you will have to cover everything yourself, and the car insurance won’t be valid. Also, if you get pulled over by the police and are not covered, you can face a ticket, fines, and possible license suspension. Some states require minimum coverage for bodily and property damage liability, and drivers who don’t have this may get fines and penalties.
  • Increased Premium – As mentioned, if you miss even one payment, your insurance provider may cancel your insurance policy. When you apply for a new one, your premium may be raised because of the lapse in coverage. Even if you go with a different insurance provider, they will check your insurance history and know if you have missed any payments. Missing one payment will be viewed as a risk by the provider, leading to an increased premium.
  • Your Debt May Be Sent to a Collection Agency – Your insurance provider may hand over the insurance policy to a collection agency. This way, they will call you all the time to make you pay. Alternatively, this may affect your credit score and cause difficulties if you apply for a loan, such as a title loan, or credit card or buy or rent a home.
  • You May Lose Your Car – If you are leasing a vehicle or have taken a loan to buy it, the lender probably requires some insurance policy for collision and comprehensive damage. If you missed some payments and are in default, the lender is entitled to take back your vehicle.

What to Do if You Can’t Afford to Pay for Your Insurance Policy

If you miss the due date for one payment, your insurance policy won’t be canceled at that instant. Typically, depending on the lender, you will have a grace period of about 10-20 days before canceling.

You shouldn’t drive your car for the time being, as it may lead to some additional fines and penalties. It is crucial to get your coverage reinstated as soon as possible. If it is only a few days, you can negotiate with your insurance provider for decreased monthly payments.

If you haven’t paid for a long time, you may have problems finding an insurance company that will cover you or end up paying huge premiums for your car insurance.


As you can see, it is not wise to miss your car insurance payments – you will fall into a bigger debt, and your policy premiums will continue to increase.

Budgeting your monthly premiums sounds like a great plan, but if you have some additional expenses, you should consider taking a short-term loan to cover it all.

Remember, missing the payments will lead to losing your coverage, the inability to drive your car when needed, and potential fines, penalties, and increased fees on insurance premiums.

As insurance companies have different policies and discounts, it is worth shopping around to find the best one that offers great discounts and monthly payments that suit your needs.

Article contributors

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Frank is a graduate of the Master's program in Economics Sciences. He has been passionate about writing in the financial niche. He enjoys discovering new ways to improve personal wealth and sharing them with his readers. In addition, Frank likes to travel and play board games.

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