Personal Finance Expert
Tyron Jones is a finance expert who has operated within the auto insurance business for more than 10 years. He has written many other finance related articles for a number of prominent publications.
Car insurance can be a complicated subject to get your head around. One tricky aspect of dealing with insurance is understanding grace periods. There are two types of grace periods that people ask about. The first has to deal with a grace period when you buy a new or used car. People want to know how long they can go before they tell their insurance about their new car. The second type of grace period involves your car insurance bill.
We’ll look at both of these grace periods in this article. This information will help you understand everything you need to know about insuring the car you just purchased and making sure your insurance stays active. Use this information to save yourself some money and stay safe and legal on the road.
Grace Periods When Buying a New Car
The first topic we’ll cover involves the grace period you have when you buy a new or pre-owned vehicle. We’ll cover what you need to do if you already have insurance, and what you need to do if you don’t have insurance. There will also be some helpful tips for you regarding what kind of insurance you should buy.
How Long Do You Have to Get Insurance if You Buy a Used Car and Already Have Insurance?
Most of the time people ask us about insurance grace periods, this is the question they’re asking. The rules regarding insurance aren’t very clear. That means people don’t really understand what’s required of them. Moreover, you don’t really deal with this situation until you’re in it, so there’s not a lot of past experience to draw on for many car buyers.
One thing that’s important to note is that each state has its own rules and laws regarding insurance. That’s because, for the most part, insurance and car insurance specifically are regulated at the state level. That means the laws in your state are going to be different from the laws in a different state. As a result, there’s no single answer regarding when you need to tell your insurance after you’ve purchased a used car.
However, you can generally expect there to be a grace period. Most of these grace periods are holdovers from the time before the internet and 24/7 customer service lines were common. Given these tools, the best choice is always to inform your insurance company immediately if you get a different car. That way you can be sure you’re driving legally and are protected while you’re on the road. After spending a pile of money on a new car, why wouldn’t you want to make sure your investment is safe should the worst happen?
The grace period you get in your state will likely range between six and 30 days. You should make sure you read your insurance agreement, as it will tell you what your obligations and deadlines are if you change vehicles. You can review your policy agreement if you don’t remember it before you purchase your new car. This way you’ll know exactly how long you have according to your state and your insurance company before you need to report your new vehicle.
One thing that many people don’t know is that you can even get insurance on a vehicle before you’ve finished purchasing it. All you need is the VIN, the purchase price, and the mileage of the car you want to buy. However, you want to be sure you know the exact vehicle you’re getting before you pre-buy insurance.
How Long Before You Need Insurance When You Buy A Car and Don’t Already Have Insurance?
Things are a bit different for people that don’t already have insurance when they buy a car. In these cases, there’s usually no grace period at all. There are some important facts to keep in mind.
First, it’s illegal to operate a car without insurance. You can face a steep fine, loss of your license, or even jail time if you’re driving while uninsured. This is true no matter the nature of the sale.
Second, if you’re buying a car from a dealership, then the dealership won’t let you take the car off the lot until you have insurance. As a result, it’s a good idea to get quotes from insurance companies as you do your car shopping. You can use a price comparison tool along with information about the vehicles you’re considering to get rapid quotes. If you have a smart phone or other internet connected device you can even get quotes from companies as you look at different cars. In many cases, all you’ll need to enter is the mileage and the VIN.
Another thing to consider is how you’re paying for your car. If you’re using a loan to pay for all or part of the car you’re buying, then it’s likely that you’re required to get a certain kind of insurance. Specifically, you’ll need to get comprehensive coverage insurance.
Comprehensive coverage is the type of insurance that covers your car for things other than damages you cause to other people, which is known as liability only insurance. Most states only require liability only insurance, but almost every financing agreement for a car loan requires you to maintain comprehensive insurance with the lender as the first payee for any payouts.
This requirement is totally legal. It exists to protect the lender from risk. If you cause an accident and don’t have comprehensive coverage, then your insurance company won’t cover damages to your vehicle. As a result, someone might be inclined to stop paying off their loan for a vehicle that doesn’t even exist anymore. With comprehensive coverage and the lender as the first payee, the lender can be sure that their risk is minimized. That means you get a lower interest rate and a more affordable car loan.
Do You Need GAP Coverage?
When you buy a car and you’re financing it, you have the option of getting GAP coverage. This is a specialized insurance product that pays the difference between what you owe on a car and what your insurance company pays out if the car is totaled.
Gap coverage can be a good idea for some people, but not for everyone. The more expensive and newer your car, the better Gap coverage is for you. That’s because more expensive and newer cars will depreciate faster. This means that insurance companies won’t value the car at what you owe on it, making it more likely that you’ll be left with a car payment for a car you don’t even own anymore. Gap coverage prevents that from happening.
However, lower value and older cars won’t depreciate as much. That means it’s likely you’ll have equity in the car when your insurance company pays out. As a result, your payout is more likely to cover all or most of what you owe on the car. That means Gap coverage wouldn’t provide any benefit for you.
Grace Periods on Auto Insurance Payments
The other type of grace period people ask about has to do with a grace period for making their insurance payments. We’ll cover some common scenarios that involve grace periods and payments below. However, there is some general information you should be aware of.
The best thing to do if you’re having problems with bills is to notify your insurance company right away. The more notice you give them, the more likely it is that they’ll be able to work out an agreement with you. This could include lowering your rate. Remember, insurance companies would always rather get paid something instead of nothing. If you can make some kind of payment and stay in touch with the insurance company, then it’s likely you’ll be ok.
What to Do If You Can’t Afford a Car Insurance Payment
The best thing to do if you can’t afford a car insurance payment is to contact the insurance company before the payment is due. There are several options for most people in this situation. Your insurance company may be able to temporarily or permanently move your due date.
Technology helps here, as in some cases you won’t even need to speak to a real person to delay your payment. For example, Geico’s app allows you to extend your auto-payment date up to nine days. That means you get another paycheck to help you come up with the money you need to pay your insurance.
Another option that most companies will offer is the ability to make a partial payment. Making a partial payment keeps you insured and prevents you from getting kicked off your insurance later. Your remaining monthly bills may go up, or your next bill might be higher to reflect the difference in your payment.
Finally, you should talk to the insurance company about ways to lower your payment. Seek out discounts that might not be applied to your bill. Things like good grade discounts for students, driver training courses, safe driving rewards, and more can all lower your payment amount and make it easier to pay your bill on time.
What to Do If You Miss a Car Insurance Payment
If you miss a car insurance payment there’s no need to panic right away. Most insurance companies have a 3-5 day grace period for your due date before your payment counts as late. This can be more or less, depending on the specific company and the laws of the state where your car is registered.
Make sure to contact the insurance company right away. This can prevent your insurance from being cut off. Most insurance companies won’t cut off your insurance immediately. After all, they’d much rather have your payment than have one fewer customer.
What to Do If Your Insurance Has Been Canceled
Sometimes times get tough and your bills don’t get paid for a while. In this case, your insurance may be canceled. You’ll need to apply for a new policy. You could apply through the insurance company you previously had, or you could apply through a different insurance company.
It’s important to keep in mind that insurance companies don’t have an obligation to provide you with coverage just because you apply. If your insurance has been canceled multiple times or your credit score is very low, then an insurance company may refuse to provide you with coverage.
If that happens, you’ll need a specialized solution. In this case, that takes the form of high-risk insurance companies. These companies specialize in providing car insurance to people with lots of tickets, those that have been dropped from insurance multiple times, and other people that more mainstream insurance companies refuse to cover.
High-risk insurance will cost more, but it can be the only option in some cases. Remember, it’s illegal to drive without insurance. Doing so will make it even harder to get insurance coverage in the future if you’re caught.
Another thing you may have to do is update your state’s DMV about your insurance status. You should do this once you obtain new insurance. That will allow you to make sure your car’s registration and your license are still valid.
Finally, you will likely have a balance left with your old insurance company. You should pay this balance off if you can. Most companies will willingly work out a payment plan with you to pay off the remainder of what you owe. If you don’t pay off your balance, then your case could be sent to a collection agency.
As you can see, there’s a lot of information when it comes to auto insurance grace periods. However, it’s important to know your deadlines. That’s true whether you’re buying a new car or just paying your car insurance bill. Having your insurance taken care of means you’re able to drive on the road legally. It also means you’re protected from damages should the worst happen while you’re on the road. Don’t let your financial safety come into jeopardy when you’re driving. Stay covered and stay protected by getting and paying your car insurance.
Whether you're buying a new car or you're a current car owner, you might have some questions about insurance grace periods. Let's take a look at some of the common questions we've had about car insurance grace periods – we've divided our FAQs into different sections based on their topic.
Grace Periods and Buying Cars (Used and New)
If you're buying a new or used car, you might have questions about auto insurance grace periods. While you should always clarify serious issues with your insurer, some of these questions may provide the guidance you're looking for.
Is there a grace period for car insurance when buying a used car?
This depends if you already have insurance on another car. If you're trading in a car for a used car, you might be able to get your current insurance to cover you on your new car. Your coverage will vary depending on your state and insurance company, but in some cases, it might last up to 30 days.
Is there a grace period for car insurance when buying a new car?
If you're buying a new car, you will need current insurance for there to be a grace period. Otherwise, you'll need to buy a policy to drive your car off the lot. Make sure to double-check with your insurer to guarantee you have coverage.
What is the grace period for auto insurance coverage?
If you already have a policy, the grace period when you're buying a different car will vary depending on your insurance company and where you live. We suggest you always talk to your insurer if you're buying a new car.
Insurance grace period when buying second car?
If you're trading in a car that you already have insurance for, you might already have a grace period with your current insurance company. This can sometimes be a few days or up to a month. This being said, you need to speak to your insurance company to ensure it's true for your policy.
How long of a grace period for car insurance?
This grace period will depend on your location, policy, and insurance provider. There are quite a few variables that can determine your grace period, so make sure to check with your insurance company.
When I purchase a car what is grace period to get insurance?
When you purchase a car, the grace period to get insurance will depend on your auto insurance provider and local regulations. This grace period can sometimes be up to 30 days, but you need to ensure this is valid for you. If you don’t have any insurance already, then you won't have a grace period.
Is there a California law for grace period when buying a new car insurance?
If you already have a car insurance policy in California, your car insurance company will likely be required to give you 10 days of coverage when you switch to a new car. If you don't have insurance, then you can't take advantage of a grace period.
What is the grace period for American Family car insurance?
American Family offers a 14-day coverage grace period if you buy a new car – it's still a good idea to contact the company directly if you already know what you're planning on purchasing.
Auto insurance written in state of PENNS. what is the grace period?
This will depend on the Pennsylvania insurance company that you work with. Unfortunately, the state doesn't have any state laws that require insurance companies to provide a grace period, so you might not have coverage if you switch your car in.
What is the grace period for my car insurance with Direct Insurance?
Direct Insurance is very cagey about its grace period. In some cases, they have no grace period. It's a good idea to contact the company directly if you want additional information about your coverage.
Do you have a grace period for insurance when buying a used car from private owner?
In some cases, if you already have a car insurance policy, you can access a grace period. This is highly-dependent on your insurance company and the state that you live in. It's important to ask your insurance company if you want to avoid a lapse in coverage.
Do you have grace period insurance from the dealer when you buy a car?
This depends if you already have coverage from your insurer – make sure to call and ask. If you don't, the car dealership will often require you to have insurance to drive it off the lot. It's never okay to drive without insurance.
Is there a grace period for car insurance when buying a used car in Mississippi?
This will likely depend on what your individual insurance company is willing to offer you. If you don't have insurance, you need to purchase it to drive the used car home. If you do have insurance, and your policy doesn't state your grace period, make sure to call your insurer.
Is there a grace period for car insurance when buying a used car in SC?
If you're a driver in SC, grace periods can vary on an insurer-by-insurer basis. We recommend that you contact your insurance company is you want to be certain you're driving with coverage.
What is the average grace period for car insurance?
The average grace period for car insurance will vary depending on state and insurance provider. Different states have different regulations in terms of grace periods. In fact, some states don't require grace periods at all.
When car insurance expires is there a grace period if changing carriers?
You might not have access to a grace period if you're no longer paying your premium (at the end of your policy). Make sure to call your insurance company to double-check. You don't want to drive without insurance.
What is grace period for adding new car to insurance?
This depends – in some cases you might not have a grace period. While many insurance companies provide grace periods to their clients, it's always a good idea to notify your insurer before you buy a new car.
What is the grace period on buying insurance on a new car in Alabama?
As in most states, the amount of time you have for a grace period in Alabama will vary depending on your insurance company. In some cases, you might be able to access up to 30 day's worth of a grace period – make sure to ask!
What is the grace period for state car insurance in Maryland?
While most insurance companies in Maryland will offer you a grace period of between 14 and 30 days, it's essential to check that this is the case with your insurance company.
IL grace period for insurance when buying a car?
While most insurance companies in IL will give you between 7 and 30 days, you need to double-check with your insurance company to ensure that you're actually covered by the policy.
What is there a grace period for car insurance when buying a used car in "Mississippi"?
Grace periods can vary on an insurer-by-insurer basis. Many will be willing to give you a 7 to 30-day grace period if you're buying a car in Mississippi, but it's important to contact your insurance company for further clarification.
When getting a new car, does old car insurance give a grace period on new car?
This is entirely dependent on your insurance company and local regulations. In some cases, state regulators require insurance companies to provide a basic amount of coverage for those buying new cars. Still, the grace period can vary largely depending on your insurance company, so make sure to contact them.
Grace Periods and Lapses in Coverage
If you have questions about grace periods and lapses, these are the questions for you. Take a look:
What is the grace period for paying your car insurance?
If you're late on your insurance payments, it can end up cancelling your coverage. Your grace period will depend on your insurer, state, and a host of other factors. In some cases, you may have up to 30 days – always double-check.
If you have insurance on your car how long is the grace period before they cancel you?
This is largely dependent on your insurance company and if there are any regulations in your state. In some cases, you may only have a few days. In other cases, you could have up to 30 days – always ask your insurance company.
Is there a grace period when car insurance expires?
If your car insurance expires, you shouldn't drive on the roads without speaking to your insurance company. You likely won't have coverage – you could face legal repercussions.
What is the car insurance grace period in NYC?
In most cases, in the state of New York, you'll have up to 15 days to pay your premiums before your insurer can cancel your premiums. Make sure to double-check this if you're late on your payments.
What is the grace period for late payments on car insurance?
The grace period for late payments on car insurance will change depending on which state you live in and what your insurance company's policies are. If you're late on your payments, or you think you'll be late in the future, contact your insurer for clarification. Related: What to do if I can't afford car insurance?
What is the grace period at renewal for car insurance?
If your policy is expired, you might not have a grace period. Make sure that you contact your insurance company if you don't believe you still have coverage. You should never drive without coverage.
When you have car insurance and its paid month to month and don't pay on time is there a grace period?
This will depend on the policies of your insurance provider and the state's regulations. In some cases, you'll only have a few days. In other cases, you might have up to 30 days to make the payment.
State of VA what is grace period for nonpayment of auto insurance?
State regulations in VA might change for the insurance industry, but at present the grace period that you have will largely be dependent on the insurance provider that you use to buy the policy.
What is the grace period for car insurance in Florida?
This will depend on the type of policy that you have and the insurance company that you're using. If you're using a weekly policy, you might only have access to a grace period of 7 days – make sure to make your insurance payments on time, and contact your insurer if you can't make a payment.
What if I have an accident during the grace period of my car insurance?
If you have a grace period that provides you with full coverage, you should be entitled to your normal coverage benefits if you're within a grace period. Related: Learn more about liability vs full coverage insurance.
Questions Regarding Specific Insurance Companies
If you have questions about grace periods from specific car insurance companies, make sure to check out the questions below:
What is the grace period for State Farm auto insurance?
The grace period depends on a few factors, including the state you're in. Some State Farm car insurance policies have a ‘reserve month' that can protect you from non-payment. Call your broker if you don't believe you're going to make your payments on time.
What is the grace period on Grange auto insurance?
If you're buying a new car with Grange auto insurance, you might have up to 30 days of a grace period for the new car. Still, this will depend on your car insurance policy – call them for further details.
What is ERIE car insurance grace period when buying a car?
While ERIE doesn't provide information on exact grace periods, they do say that you have coverage for a new car if its title is in your name. They encourage you to call them before you purchase the new car.
How long does PEMCO insurance give you for grace period for car?
If you have a PEMCO policy that's valid for at least 30 days, you should have at least 30 days of grace period coverage for any new car that you purchase. This being said, it's a good idea to call PEMCO and notify them before you buy a car.
What is the grace period for AAA car insurance?
Unfortunately, AAA doesn't offer clear information on their grace period for car insurance – it appears to vary depending on state regulations. Call your local office or broker if you believe you need access to a grace period.
How long AAA car insurance bill grace period?
If you can't afford to pay your AAA bill on time, it's essential to contact your local office or broker as quickly as possible. The company doesn't offer clear information on grace periods, so it's a good idea to contact them for clarification in your state.
What is the grace period for Colonial car insurance?
Colonial is another insurance provide that doesn't offer clear guidance on the type of grace period that they offer clients. This might be because it varies depending on the state that you live in. Contact Colonial if you believe you'll be late making a payment.
What is the grace period for Progressive car insurance?
Progressive grace periods vary on a state-by-state basis, but the company normally gives clients around 10-20 days. Make sure to contact Progressive if you're going to be late paying your insurance.
How long is Farmers Insurance grace period for a new car lease?
If you have a new car lease, the grace period can be quite complex, and might depend on your location. The best way to determine your Farmers Insurance grace period is to contact their help line.
What is USAA grace period auto insurance?
USAA grace periods can vary, and they sometimes offer promotional grace periods to combat certain issues (such as coronavirus). If you want the latest grace period, contact their head office.
How long the of grace period of buying a new car with Liberty Mutual auto insurance ?
Liberty Mutual does not provide public information about its insurance grace periods for new cars – it might depend on your policy. Contact the company's customer service team to find out.
What is the grace period for being late with my State Farm Auto & Home Insurance?
State Farm is an insurance company that has varying grace periods depending on if you've paid for a reserve month and a host of other factors. You should have at least 10 days, but make sure to confirm this if you're planning on paying your bill late.
How long a grace period do I have to pay my car insurance with The General auto insurance?
The General doesn’t provide clear guidance on grace periods, so it's a good idea to contact their customer service department and explain your circumstances if you're going to make a late payment.
What is the grace period for CSAA auto insurance payment?
There will typically be a grace period, but this is often determined by state regulations. Make sure to contact your local CSAA office if you want to make sure you don't lose your coverage for a late payment.
For NC Farm Bureau, how much grace period do I have on my car insurance?
NC Farm Bureau doesn’t provide clear guidance on grace periods for their insurance policies. We recommend that you contact them in advance if you're going to make a late payment.
How much grace period is there on auto insurance at Discover?
Discover is not a direct provider of insurance, so you shouldn't be asking them for a grace period for your auto insurance company. Make sure to contact your insurance provider to find out your grace period.
How long is the grace period to contact auto insurance for purchase with Westfield Insurance?
If your insurance is already expired, you need to contact them straight away. In the case of a policy expiring, you might not have any coverage after it expires – don't drive without coverage.