When a person is late on their automobile insurance payment, there is a good chance that they could expect to be charged late fees or face other consequences. Insurers typically take late or absent payments very seriously, and if a premium for coverage is not received when due, a lapse in protection will occur. This means that between the time when the payment was due and when the insurer receives payment, the policyholder is not covered under the policy. In some states, such as Louisiana, providers are required by law to report any lapse in coverage that may occur, resulting in a series of fines, which can be more expensive than the amount owed to the carrier and also become a hassle to resolve the issue with the state.

Consumers should also note that are not required to offer a grace period for premium payments and automobile insurance coverage will cease for non-payment. In addition, a reinstatement fee may also be charged if the motorist chooses to continue the policy. The most dangerous part of having policies lapse is the fact that the vehicle is uninsured and if the motorist takes the chance and operates the automobile, any incidents that may occur would be uncovered and could result in financial hardship due to expenses that can arise, fines and even jail time. During a lapse, a motorist should refrain from driving until the issue is resolved.