Is There A Grace Period For Car Insurance?
We cover the two main types of car insurance grace periods.
Powered by 
Key Points:
- The grace period to add a new car to your existing policy can be up to 30 days, depending on the company and state.
- Companies can also give late payment grace periods of up to 30 days before they cancel a policy for late payment.
- Call your company to discuss adding a new car or a late payment as soon as you can to avoid a lapse in coverage.
Life can get in the way of important deadlines–even your car insurance payments. If you’ve heard the term “car insurance grace period” thrown around, it typically refers to one of two things: making premium payments on time or getting car insurance for a new vehicle.
In this guide, we outline the typical length of a car insurance grace period and how many times you can take advantage of your plan’s flexibility. Understanding a company’s car insurance grace period may also be a selling point when choosing a new provider. We’ll outline some of today’s best car insurance providers so you can pick the right option.
Powered by 
Is There A Grace Period For Car Insurance?
There are two types of car insurance grace periods: when you add a new car to your policy or when you make a late payment. Whether or not you can have a grace period for car insurance depends on your state, provider, and situation. Car insurance grace periods can last up to 30 days, but they can also be as short as a few days. There’s no universal length for a car insurance grace period. Contact your company as soon as you need a grace period to keep your coverage valid.
What Are The Types Of Car Insurance Grace Periods?
A car insurance grace period is the amount of time your insurer or your state laws allow you to either delay adding a new car to your policy or delay paying for your car insurance premium without a lapse in coverage.
Car Insurance Grace Period For Adding A New Car
Imagine you’re at the dealership and found a price on a new vehicle that’s too good to resist. Do you need to call your insurance company right away? Not if you already have coverage on an existing vehicle–your current plan will cover your vehicle for a little while.
If you currently have auto insurance on a car, you typically have a grace period of seven to thirty days before you have to report your new car to your insurance company without a penalty. This applies if you trade in your old car, as well.
However, if you don’t currently have auto insurance, there is no grace period. You’ll need to call an insurance company, purchase a plan, and give the dealership proof of insurance before you’ll be allowed to drive the car off the lot.
What If You’re Starting An Auto Loan?
Let’s say you own your car outright and have minimum insurance coverage, but you want to use an auto loan to upgrade your ride. Lenders typically require full coverage auto insurance–which is minimum coverage plus collision and comprehensive coverage–so you’ll need to upgrade your coverage with your provider the day you get the new car. The grace period doesn’t apply because of the lender’s requirements.
Car Insurance Grace Period for a Late Payment
The other type of car insurance grace period has to do with your monthly payment. Imagine you have a difficult month or you simply forget to pay your premium. Will the company cancel your plan if you don’t pay your car insurance right on time?
It depends. Providers and state laws set specific requirements on how long you can delay payment before your car insurance coverage is canceled.
In some cases, your car insurance company is allowed to cancel your plan after a couple of days without payment, and your plan will lapse because of a non-payment, leaving you uninsured. You may be able to pay a fee to reinstate your plan immediately. Other companies may offer grace periods of up to 30 days.
Contact your provider’s customer service to learn its policies on grace periods. You might get a nice agent who can waive your late payment fee if they sympathize with your situation, too. But don’t just assume you have 30 days, because you could end up an uninsured driver.
State Laws On Auto Policy Grace Periods
State laws differ when it comes to how grace periods are handled. Most states require car insurance companies to provide a written letter with at least 10 days notice explaining their intent to cancel your plan. Look up the car insurance laws in your state so you know what to expect.
Do All Carriers Offer A Car Insurance Grace Period?
Not all car insurance companies offer grace periods in all states. But many have car insurance grace periods to remain competitive, so it’s important to talk to an insurance agent about plan details. Some companies may even allow a specific number of late payments before enforcing stricter regulations.
Other companies may charge a late fee or set a higher premium the next time you renew your auto insurance.
Most companies don’t want to lose you as a customer over one late payment. However, since car insurance plans are based on trust, it’s a good idea to do your due diligence.
How Long Is A Car Insurance Grace Period?
As we mentioned, grace periods vary between a couple of days to a month–quite a large range. State car insurance laws also come into play if your plan lapses.
All but two states, New Hampshire and Virginia (until July 2024) require some form of car insurance at all times, and even those require confirmation to drive without insurance from the DMV. So even in those states, you can’t simply jump in a car without insurance documentation.
The specific length of a grace period and lapse qualifications come down to your location and plan. If possible, get this information in writing from your company before you face late payments or allow a gap in your coverage.
Can You Use The Grace Period For A Late Payment Every Month?
Typically, car insurance companies place limits on how many times they’ll accept late payments. If your company has no limits on how many times you can take advantage of your grace period, it’s still not a great idea to depend on this safety net.
Many providers charge late fees or raise premiums when your contract renews, significantly adding to your overall insurance rates in the long run.
How Does A Grace Period Work When Buying A Car?
If you’re buying a new car and wondering about grace periods, there are three things that come into play:
- The rules of the car dealer
- Your state auto insurance laws
- Your car insurance provider
For example, some companies will allow you to drive off the lot with your new car if you have insurance for another vehicle. As long as you call the auto insurance company within a specific number of days–typically up to 30–to order new coverage, you may be covered under the existing plan.
However, many car dealerships require a driver’s license and proof of insurance covering the new vehicle to buy a car. In this case, what the dealer says goes.
Be aware that even if your state, dealership, and car insurance company allow a grace period, it’s helpful to get the grace period details in writing before you drive away from the dealer. If you get pulled over or are involved in an accident during this time, it will be easier to prove grace period regulations to the police if you have physical proof.
Buying A Car From A Private Seller
Even if you purchase a used or new car from a private seller, you must follow state laws and policy regulations before driving home.
We also recommend taking care when you test drive a car from a private dealer. Ask the seller to show proof of insurance before your loop around the block to avoid breaking the law.
Take a look at your state’s required insurance minimums when checking the insurance in place, since there are still a significant number of drivers that slip by without the required amount. In fact, according to data from J.D. Power the number of American households with at least one car but don’t have car insurance rose from 5.3 percent at the end of 2022 to 5.7 percent in the beginning of 2023. That number can vary by state, too–South Dakota saw a 106 percent increase in uninsured drivers during that same period, while Hawaii saw a 37 percent decrease.
What Happens If You Have A Car Accident During A Grace Period?
If you have collision coverage with a provider that offers a car insurance grace period, you are covered under your other car’s plan during this time.
For example, let’s say your company provides a 30-day grace period for new cars if you have a plan for another vehicle. If you get into an accident during these 30 days, your other car’s plan will cover you up to the purchased maximums of that plan.
Keep in mind that insurance costs on your new car could be higher than those from your old car, so it’s important to get your new plan rolling as soon as you can.
What Are the Dangers of Letting Your Auto Insurance Lapse?
If your coverage lapses due to missed payment or a delay after you purchase a new car, how long can you be without car insurance? It’s important to stay off the roads until you can pay your balance or set up a plan. Penalties for not having liability coverage increase the longer you’ve driven without it.
Getting into an accident can cost tens of thousands of dollars for you and the other person involved if you do not have active auto insurance in place. In addition to these large expenses, there are also legal consequences for driving without insurance based on state laws.
Depending on where the accident occurred, you could face:
- Fines
- License points
- License suspension and registration suspension
- Vehicle impounding
- Jail time
- Restrictions on car insurance in the future
Many companies offer same-day or next-day car insurance, so be sure you have a plan in place and proof of insurance before you get behind the wheel of a car.
Besides the risks of driving without insurance, you’ll also face higher insurance costs the next time you buy a policy. Your old company will notify the DMV that it canceled your coverage. Immediately, you’ll be an uninsured driver. This will count as a lapse until you get new coverage. And when you do, you’ll see that auto insurance rates are more expensive because of the lapse in your history.
What Should You Do If You Miss A Car Insurance Payment?
Let’s say things aren’t quite lining up this month, and you know you’ll be two to three days behind on your payment. We recommend starting with these two steps:
- Look at your policy for specifications on missed payments.
- Check state laws on car insurance grace periods on the local Department of Motor Vehicles website.
Though it’s important to pay your premium as quickly as possible, check how your grace period works to ease your worries about insurance lapses. Call your company to alert them of the delay and confirm your findings if you are concerned.
If your car insurance does lapse, call your company as soon as possible to figure out how to reinstate your plan or buy a new policy.
You can also reassess your current car insurance policy limits. If full coverage is too expensive, you may be able to get by on minimum coverage to save some money for a while.
Car Insurance Grace Period: Conclusion
Your insurance company may offer a grace period for missing a payment or adding a car to your policy. However, there’s no standard grace period length across companies or states. Call your provider as soon as you need a grace period to find out what the rules are.
Powered by
Our Car Insurance Recommendations
In our industry review, we highlighted car insurance providers that put customers first – through comprehensive coverage plans, affordable rates, and assistance during the quotes and claims processes. High customer care ratings are also generally a sign that a company will be easy to work with in the event of a payment slip-up.
Here are a few top contenders for auto insurance.
State Farm: Best Overall Provider
State Farm doesn’t list its car insurance grace period length online. However, the company does allow you to combine your monthly payment plans with your other State Farm plans and offers billing reminders or automatic debit.
Here are some top things to know about State Farm:
- Offers extensive coverage, including perks like roadside assistance and rental car coverage
- Earned an A++ rating from AM Best, which is the highest rating possible
- Known for its large discounts for new drivers, students, and bundling plans
Geico: Best for Discounts
Geico is very clear about its car insurance grace period. If you miss a payment, you will receive a notice clarifying how long you can delay your bill without plan cancellation. Overall, Geico is known as one of the most affordable and customer-focused car insurance companies in the country.
Here are some top things to know about Geico:
- Third-largest car insurance company according to the National Association of Insurance Commissioners (NAIC)
- Offered in all 50 states with some local offices
- A++ rating from AM Best
Car Insurance Grace Period: FAQ
Below are a few frequently asked questions about car insurance grace periods.
Do you have a 10-day grace period for car insurance?
A 10-day grace period for car insurance payments is a common length, though companies can give anywhere from 0 to 30 days. Don’t assume you have a 10-day grace period. Check with your car insurance company first, as it could be as short as one day.
What happens if I pay my car insurance a day late?
In most cases, your company will allow a grace period of at least a few days. However, in some states, auto insurance companies can cancel your policy after a single day of nonpayment. If a company cancels your existing insurance policy, getting new car insurance can be more expensive
Does The General car insurance have a grace period?
Yes, The General Insurance offers a grace period of up to 30 days depending on the state. Be aware that the grace period may be as short as a few days in some states, so talk to your auto insurance agent to get the exact timeframe.
How We Rate Insurers
Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:
- Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
- Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
- Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
- Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
- Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
- Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.
*Data accurate at time of publication.