When you have missed a car insurance payment, the insurance company will issue a notice that you must either pay the premium within a certain amount of time or your coverage will be canceled. In most cases, the notice of intent to cancel will give you a grace period of 10 to 30 days, depending on the insurance company and the state in which you live. If you have not paid the premium by the end of that time, your policy will be canceled and the state department of motor vehicles will be automatically informed of your lack of coverage.
Car insurance is required in almost every state in the country, and insurance companies are required to notify the DMV when a policy is canceled or falls into default. Once this happens, the DMV may suspend your driver license, revoke the tags and registration on your vehicle, or even impound the vehicle if you are stopped by a police officer without suitable coverage. The consequences of driving without insurance are severe, especially if you are involved in an accident with damages or bodily injury. In fact, some states allow the uninsured person to be charged as the at fault party even if the accident was caused by someone else.
If you are planning to change insurance companies, the best advice is to purchase another policy before you cancel the first one, and to follow the proper procedure for cancellation. In most cases, this means notifying your insurance company in writing at least one billing cycle before you plan to stop paying on the policy. If you do not give the insurance company enough notice, automated billing may cause you to receive a bill for the car insurance policy even after it is no longer any use to you at all.