Insurance Lapse in New York: An insurance lapse refers to a period during which a vehicle registered in New York State has no liability insurance coverage.
This can occur for various reasons, such as when your insurance is canceled and the date your new insurance begins, or when you surrender your vehicle plates.
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What is an insurance lapse?
An insurance lapse means that there is no liability insurance coverage for a vehicle registered in New York State for a period of time. Driving a registered vehicle without liability insurance, also called an insurance lapse, is illegal in New York.
What can cause an insurance lapse?
An insurance lapse can occur between the date your insurance is canceled and the date:
- your new insurance begins
- you surrender your vehicle plates
- your registration expires
- ‘other proof’ of insurance (for example, a vehicle registered in another state, or a vehicle repossessed or impounded) is valid
- your insurance company reinstates your insurance coverage
An insurance lapse can also occur between the date you register your vehicle and the date your new insurance coverage begins.
What are the consequences of an insurance lapse?
If there is a lapse of insurance for a vehicle registered to you, the DMV can suspend your registration and driver’s license. You will also need to pay fines and penalties depending on how long you did not have insurance coverage.
Fines and penalties
Your Suspension Order from the DMV shows how much you must pay. The amount depends on how long you did not have insurance coverage. Your civil penalty payment is calculated based on the following table:
| Insurance lapse (in days) | Civil Penalty |
|---|---|
| 1 – 30 days | $8 per day |
| 31 – 60 days | $10 per day |
| 61-90 days | $12 per day |
For example, if your insurance lapse is 25 days, you may pay a civil penalty of $200 ($8 per day for 25 days) and not turn in your plates, or you must surrender your plates and serve a registration suspension of 25 days.
If your insurance lapse is 90 days, you may pay a total penalty of $900 ($8 per day for the first 30 days = $240; plus $10 per day for 31 days to 60 = $300; plus $12 per day for days 61-90 = $360) and not turn in your plates; or you must surrender your plates and serve a registration suspension of 90 days.
If your insurance lapse is more than 90 days, you cannot pay a civil penalty. You must surrender your vehicle registration and plates until the suspension period ends. The DMV will also suspend your driver’s license for the same number of days as your registration suspension. To reinstate your driver’s license, you must pay the DMV a $50 license suspension termination fee.
Driving without insurance
Do not drive any vehicle that is not insured. If you drive without insurance (with lapsed insurance), you could face serious consequences, such as:
- you could be arrested or ticketed
- your vehicle can be impounded by a law enforcement officer
- the DMV will revoke your registration and your driver’s license
Being involved in a traffic crash
If your vehicle does not have insurance and you or someone else driving your uninsured vehicle is involved in a traffic crash, the DMV will revoke your driver’s license and vehicle registration for at least one year. The traffic court fine could be as much as $1,500 for driving without insurance or allowing another person to drive your uninsured vehicle. You will also need to pay the DMV a $750 civil penalty to restore your driver’s license if it is revoked.
You could also be responsible for accident damages if you are at fault. This could include medical bills, property damage, and legal fees. You could also be sued by the other party or their insurance company for compensation.
How to avoid an insurance lapse?
To avoid an insurance lapse, you should always maintain liability insurance coverage for any vehicle registered in New York State. You should also notify the DMV electronically if:
- your insurance coverage is canceled
- your insurance coverage is reinstated
- you get new insurance coverage
- you sell or transfer your vehicle
- you surrender or change your vehicle plates
- you move out of state or register your vehicle in another state
You should also respond to any DMV letters or orders regarding your insurance status. You may need to provide proof of insurance or other documents to resolve an insurance lapse. If you do not respond to the DMV letters or orders, the DMV may suspend or revoke your registration and driver’s license.
How to pay an insurance lapse civil penalty?
If you have an insurance lapse of 90 days or less, you may choose to pay a civil penalty instead of surrendering your vehicle plates and serving a registration suspension. You can pay (and remove a suspension) if:
- you have not paid a civil penalty in the past 36 months (3 years)
- your insurance company has filed an electronic notice of insurance coverage with the DMV
- you have a Suspension Order that states you are eligible to pay a civil penalty
You can pay the civil penalty online, by mail, or at a DMV office. You will need the following information:
- the 10-digit document ID number from your Suspension Order
- your vehicle plate number
- your vehicle type (also called class – e.g. PAS, COM)
- the first 3 letters of the registrant’s name
Your payment does not guarantee that the DMV will restore your registration, or close other suspensions or revocations you have. It is your responsibility to know if the DMV restored your registration before you drive the vehicle. You can check the status of your driving privileges and vehicle registrations through [MyDMV]. The DMV will not automatically send you a new registration document in the mail.
Civil Penalty for Insurance Lapse
If your insurance lapse is for 90 days or less, you can pay a civil penalty to remove a suspension. The amount depends on how long you did not have insurance coverage. For example, if your insurance lapse is 25 days, you may pay a civil penalty of $200 ($8 per day for 25 days) and not turn in your plates. If your insurance lapse is 90 days, you may pay a total penalty of $900 ($8 per day for the first 30 days = $240; plus $10 per day for 31 days to 60 = $300; plus $12 per day for days 61-90 = $360) and not turn in your plates.
How to Resolve an Insurance Lapse
To resolve an insurance lapse, you must either prove that you have insurance coverage, prove that you sold the vehicle, or prove that insurance coverage was not required. If you have insurance coverage, also ask your insurance company (do not ask your agent or broker) to file an electronic notice of insurance coverage with the DMV.
New York State’s Auto Insurance Requirements
In New York State, you must have New York State-issued automobile liability insurance coverage to register a vehicle. The minimum amount of liability coverage is as follows:
- $10,000 for property damage for a single accident
- $25,000 for bodily injury and $50,000 for death for a person involved in an accident
- $50,000 for bodily injury and $100,000 for death for two or more people in an accident
Your liability insurance coverage must remain in effect while the registration is valid, even if you don’t use the vehicle. The insurance must be New York State insurance coverage, issued by a company licensed by the NY State Department of Financial Services and certified by NY State DMV1. Out-of-state insurance is not acceptable.
The insurance must be issued in the name of the vehicle registrant, and remain in the name of the registrant at all times. Both the primary registrant (first name listed on the registration) and the co-registrant must sign the Vehicle Registration/Title Application (MV-82) and provide their proofs of identity and date of birth. Both names must appear on the Insurance ID Card1.
The DMV requires auto liability insurance to register a vehicle in New York. When you get insurance, your insurance company will issue proof of insurance in two ways:
- It will give you two original NY State Insurance ID Cards or provide you with access to your digital electronic NY State Insurance ID Card
- Send an electronic notice of insurance coverage to the DMV (your insurance agent or broker cannot file this notice)
Your NY State Insurance Identification Cards and the electronic notice of insurance together verify your insurance coverage. You must register your vehicle at the DMV within 180 days of the effective date on your insurance ID card.
The Role of the New York DMV in Insurance Lapses
The New York Department of Motor Vehicles (DMV) is the state agency that oversees the registration and insurance of vehicles in New York. The DMV plays an important role in enforcing the state’s insurance laws and preventing insurance lapses. Here are some of the ways that the DMV is involved in insurance lapses:
- The DMV requires all vehicles registered in New York to have liability insurance coverage at all times. The minimum liability insurance limits are $25,000 for bodily injury to one person, $50,000 for bodily injury to two or more people, and $10,000 for property damage in any one accident.
- The DMV monitors the insurance status of registered vehicles through electronic notifications from insurance companies. If an insurance company cancels, reinstates, or changes the coverage of a vehicle, it must notify the DMV electronically.
- The DMV sends letters or orders to vehicle owners or registrants if there is a lapse of insurance for their vehicle. A lapse of insurance means that there is no liability insurance coverage for a vehicle registered in New York for a period of time. The letter or order will explain the reason for the lapse, the consequences of the lapse, and the steps to resolve the lapse.
- The DMV imposes fines, penalties, suspensions, and revocations for vehicle owners or registrants who have an insurance lapse. The amount and duration of these sanctions depend on how long the lapse lasted and whether it was the first or subsequent lapse in the past 36 months. The DMV also collects civil penalties from vehicle owners or registrants who choose to pay instead of surrendering their plates and serving a registration suspension.
- The DMV enforces the state’s laws against driving without insurance or allowing another person to drive an uninsured vehicle. If a vehicle owner or registrant or someone else driving their uninsured vehicle is stopped by a law enforcement officer or involved in a traffic crash, the DMV will revoke their registration and driver’s license for at least one year. They will also need to pay traffic court fines and civil penalties to restore their driving privileges.
- The DMV provides online services for vehicle owners or registrants to check their insurance status, pay civil penalties, and submit proof of insurance or other documents to resolve an insurance lapse. Vehicle owners or registrants can access these services through [MyDMV]. They can also contact the DMV by phone, mail, or in person at a DMV office for assistance.
The role of the New York DMV in insurance lapses is to ensure that all vehicles registered in New York have adequate liability insurance coverage and that vehicle owners or registrants comply with the state’s insurance laws. By doing so, the DMV protects the public from uninsured drivers and helps prevent financial losses and legal troubles for vehicle owners or registrants who have an insurance lapse.
In conclusion, An insurance lapse in New York is a serious matter that can result in fines, penalties, suspensions, revocations, and legal troubles. To avoid an insurance lapse, you should always keep your vehicle insured and inform the DMV of any changes in your insurance status. If you have an insurance lapse, you should respond to the DMV letters or orders and pay the civil penalty if you are eligible. You should also make sure that your registration and driver’s license are restored before you drive your vehicle again.
Insurance Lapse: Frequently Asked Questions (F&Qs)
What is the meaning of no lapse in coverage?
A lapse in insurance coverage refers to a period where you didn’t have insurance because your policy ended and you didn’t have new coverage to replace it. This can happen for various reasons, such as missing a premium payment, the premium payment not being received by the due date, not renewing the policy, or your insurer canceling your policy for reasons such as too many claims filed.
On the other hand, “no lapse in coverage” or “no-lapse guarantee” is a feature of some insurance policies, particularly life insurance. It is an agreement as part of a life insurance policy in which the death benefit for the insured is assured. This guarantee is only effective if premiums are paid regularly and on time. During the no-lapse period, the insurer guarantees the coverage will continue, even if the cash value drops to zero. Essentially, a no-lapse guarantee can provide a policyholder with a guaranteed death benefit, for life, for a certain amount – even if their cash value component has nothing in it.
What is a no-lapse date for life insurance?
The “no lapse ending date” or “no lapse date” in a life insurance policy refers to the date until which the insurer guarantees that the policy will not lapse, provided that the required premiums are paid. This is often seen in universal life insurance policies.
If the “no lapse ending date” passes, it does not mean that you lose all your money and have to re-buy life insurance. It simply means that the policy is no longer guaranteed not to lapse. As you get older, your cost of insurance rises. The premiums you have been paying will probably not be enough to keep the policy going. So you will either have to start paying a higher monthly premium, or you lose the policy.
A no-lapse guarantee universal life insurance policy is designed to be a long-term insurance solution that is guaranteed to stay in force until a certain age. These ages usually range until age 90, all the way to age 120.
You should be getting an annual statement that should show your current policy values and provide projections about your policy in the future. You could also call the company and ask for an “in-force illustration.” That will give you a good idea of how the policy is performing.