The state Department of Motor Vehicles (DMV) and your auto insurance provider and charge you fees and higher costs for having a lapse in coverage. An auto insurance coverage lapse can indicate you are a high-risk driver.

Insurance providers peg a lapse in coverage as a potential risk factor. As such, they may increase your car insurance rate by eight or more percent for less than 30 days without coverage. You could see a premium of 35 percent if the lapse is longer than 30 days.

Your state can also charge a civil penalty for an insurance lapse. If your vehicle is registered without insurance, you may be breaking state laws. To avoid this, you may need to turn in your license plates when you cancel your coverage.

Similarly, the state DMV could suspend your license for not having auto insurance. The state may assume that you are still driving your registered vehicle.

However, you may cancel your insurance to get a different level of coverage. For instance, lenders can require you to have full coverage while you are still making payments for the vehicle. Once you pay off the car, you can cancel the full coverage and select a less costly insurance policy.

You can also cancel your insurance policy to switch to a different provider that has better rates. Shopping around for auto insurance, and comparing providers’ rates. You may be able to find the same amount of coverage for less at a different company.

You may also want to cancel your policy or remove yourself from someone else’s policy. In some cases, individual coverage can be less expensive.