Top Insurance Consequences

Simply put, carriers view individuals who frequently let their insurance lapse as poor risks. That means if you fall into this group, your choice of providers will be limited and you'll likely have to pay much higher than normal premiums―even if you have a spotless driving record and claims history.

Some insurers might refuse to reinstate your coverage, or charge you a higher rate to do so. And, some might force you to complete the application process again.

Also, policy lapses can surface on your credit history, leaving a negative impression for current and prospective creditors, employers, and others who view your report.

Top Legal Consequences

Many states require insurance companies to notify the state's motor vehicle department once a car insurance policy has lapsed for an individual living within its borders. This action usually triggers an insurance inquiry by the agency. Those affected will need to prove to the department that they have the proper financial protection in order to be allowed to drive, or to let others use their vehicle. Some additional requirements might apply, depending on the state.

If you're caught driving with a lapsed policy, you might face citations, fines, license and registration suspensions, and even jail time. Also, no one may be allowed to drive your vehicle while your penalties are being served.