Am I still covered by my car insurance policy if I had an accident
on the same day my insurance expired? I thought I had
coverage for the full day, but my auto insurance company says that
my coverage ended at 12:01 that morning and I'm out of luck. Could
that really be true?
What your car insurance company says is indeed true. Most auto
insurance policies are set to terminate at 12:01 a.m., so if you
look at your insurance card,
or payment notice, you should see that coverage only exists up to
the expiration date.
When a policy ends at 12:01 a.m. you end up having just one
minute of coverage on your expiration date, not a whole day's
worth. Thus, an accident at 12:02 a.m. or later on the expiration
date wouldn't normally be covered.
We agree that car insurance policies can be confusing,
especially on the time that the policy ends. (See "
5 things to double-check on your policy
" for more information.) The actual final due date for
payment is the day before the expiration date.
States with insurance verification systems have found numerous
cases of one-day lapses in car insurance coverage because of
motorists' incorrect understanding about the cancellation of
policies and even inception of new ones. Be aware you
may end up with a gap in coverage if you:
- Start a replacement policy and cancel your old policy on the
same day. It's very possible that you'll end up with your
old policy ending at 12:01 a.m. and the new policy not starting
until 12:01 a.m. the next day.
- Wait to shop and get a new policy or renew your old one until
your expiration date. If you do this, you're too late
because your car insurance policy has already lapsed.
- Make a renewal payment on your policy expiration date.
This will result in a lapse since the coverage already expired at
In most states, car insurance policies don't have a grace
period. So, if your payment isn't received before 12:01
a.m. of the expiration date, your policy ends immediately.
State laws require car insurance companies to send out a
cancellation notices. However, auto insurers may be permitted
to satisfy that law by, within the given time period (10 to 15 days
usually), mailing the premium payment bill with the cancellation
date plainly stated on it and informing you that if you don't pay
by that the policy will terminate.
You can check with your
state's department of insurance
to get specifics on their rules surrounding cancellation notices
and if any grace period is given for auto policies. I
wouldn't get your hopes up, though, since your insurer already said
your coverage had ended, and they should be abiding by state
As you've now discovered, a lapse in auto coverage is bad.
First, since you're
you're left financially responsible for damages you caused to
others. You'll need to pay out-of-pocket for any damages your
car sustained as well.
Next, you can be cited for driving without insurance - this
offense comes with penalties such as fines and jail time (depending
upon your state laws). Also, your Department of Motor
Vehicles (DMV) may have the authority to hit you with penalty fees
for being uninsured and be able to suspend your license and/or
vehicle registration. To reinstate them, you usually have to
show proof of insurance in the form of a SR-22.
Lastly, a lapse in auto insurance coverage (and an accident to
boot) can cause your auto insurance rates to skyrocket. You
need to get a policy back in place as soon as possible.
Rating systems of car insurance providers vary greatly, so
comparison shop to find the insurer that doesn't care as much about
a small lapse in coverage and the at-fault accident you just had.
(See "3 ways to save big on car insurance")