What happens if you can't pay your car insurance?

If you can’t pay your car insurance, your policy will be cancelled once you miss a payment or your grace period ends. If you drive or get into an accident after your policy has been cancelled, you could face the consequences of driving without insurance such as fines and license suspension or revocation.

If you can’t afford car insurance, look into ways to lower your premiums such as increasing your deductible or lowering your coverage. If you cannot afford even your state’s minimum coverage requirements, you should stop driving your vehicle until you can pay your car insurance. In most states, it is illegal to drive without the state’s minimum coverage requirements. The exceptions are New Hampshire and Virginia, but you still must prove financial responsibility in other ways.

What To Do If You Can’t Pay Your Car Insurance

• Stop driving when your policy isn’t active. Contact your insurer to cancel your policy in order to stay on good terms with the company. Depending on your state, you may also be required to turn in your license plates/vehicle registration if you cannot afford car insurance.

• Ask about any discounts or payment plans. Many insurance companies allow you to pay your car insurance in monthly installments. If you normally pay every six months or every year, it may be more affordable in the short term to pay monthly instead, though the monthly rate will add up to a higher total over the course of the year than paying in full up front. You should also ask your insurer about any discounts they offer that you may be eligible for.

• Lower your coverage or increase your deductible. Decreasing the amount of coverage you have will result in lower premiums. For instance, you can consider dropping collision and comprehensive insurance if your vehicle is not financed, since both are optional in every state. Increasing your deductible will also result in lower premiums, but it will mean you have to pay more out of pocket when you file a claim.

• Compare quotes from other insurance providers. You may be able to find a car insurance policy you can afford by switching car insurance companies. You should compare quotes from at least three different insurers to make sure you are getting the best rate.

Some states, including California, Hawaii, and New Jersey offer subsidized car insurance programs. For instance, California offers discounted auto insurance rates for drivers whose annual household income is below a certain amount. Eligibility requirements vary by state.

To learn more, check out WalletHub’s guide on the penalties for driving without insurance as well as our picks for the best cheap car insurance companies.