Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Written by Rachael Brennan
Licensed Agent for 15 Years Rachael Brennan

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Jun 21, 2022

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Key takeaways...

  • Many car insurance companies will backdate your policy if you have a brief lapse in coverage
  • A “No Known Loss” letter may be required to get retroactive auto insurance coverage for this lapse
  • The longest you can backdate coverage for is typically up to 60 days
  • Other types of backdating insurance are considered fraud, and reputable insurers will not do it

Can insurance companies backdate premiums? Potential insureds in the market have been asking car insurance carriers to backdate coverage for years now. The whole concept of backdating a car insurance policy and premiums is not new.

The important thing to remember is that what separates legal backdating and fraud is whether there has been a monetary loss in the time period the insurance is backdated for. As a consumer, it is always fair to ask the question of should you truly need the backdated coverage to happen. What happens if I have a lapse in car insurance coverage? Let’s talk about that.

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What does backdating a car insurance policy mean?

So what exactly is the concept of having a car insurance policy premium be backdated?

Think about car insurance, in this aspect, as if you had a time machine. The whole idea of backdating car insurance is to buy a policy for a past period of time.

Can you backdate an insurance policy? Let’s say you purchased a vehicle a week ago but still don’t have car insurance. At that point, you’re considered an uninsured driver. And legally, you need to have a car insurance policy if you’ll be driving that car.

What you may do in this instance is to reach out to a car insurance carrier to see if you can get a policy that went into effect a week ago, when you actually picked up the new car, rather than today.

Backdating is different than how insurance typically works. A car insurance policy is usually a forward-looking product.

You are buying a policy contract that is going to go into effect, at the earliest usually, the minute that you pick up the phone to call the insurance carrier. The idea is not typically to have it go into effect in the past.

You may possibly be able to backdate your insurance with a company like Geico or Progressive if, for instance, you’ve moved and forgot to change your address. Your ZIP code heavily influences your rates, so make sure to update your information if you moved as soon as you can.

While you’re at it, update any other policy. The rules regarding backdating other types of insurance vary. Can you backdate a worker’s comp policy? Can you backdate renters insurance, or what about backdating health insurance after cancellation? These are much more difficult to do, so it’s best to make it a priority to update when you move.

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When can you backdate car insurance?

When can car insurance be backdated, and why did it come up?

There are a few reasons why it may show up, but it’s important to know that it isn’t a very common occurrence.

Obviously, the fraudulent answer is that someone is trying to get an accident covered that happened while they were uninsured. This happens more than you’d think which is why uninsured motorist auto insurance is so popular. However, what else might it be used for, if you have no lost property expenses?

If your need to get car insurance if your policy coverage lapsed for some reason — possibly from a missed payment — it can be harder to get insurance, as you can see below.

In the event that you truly do need to have a car insurance policy backdated because of a coverage lapse, you can certainly try. Backdating an insurance policy occurs when you’ve had a lapse due to non-payment with no potential claims damage during that time.

You may also be considered a high-risk or convicted driver, which is going to cause your insurance rates to spike. Check out these rates for a 45-year-old male in California, and you can see how having a lapse in coverage is going to cost you.

Six-month premiums for no-lapse vs lapse in coverage
Company (six months premium)No LapseAfter LapseRate Increase
Liberty Mutual$696.00$810.0016.38%
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As you can see, Liberty Mutual increases the most in this instance, going up more than 16 percent.

That’s because most insurance policies have a grace period after it ceases to be in effect. What that means is that you’ll have an extended period of time after your policy is canceled to reinstate it, as long as you don’t get into an accident.

If you’re backdating insurance after cancellation, you’ll likely have to pay a fee. So it’s best to keep everything current.

In the insurance industry, as long as it is within the regulatory guidelines of the state’s department of insurance where you are looking for coverage, chances are you will be able to find an insurer that will abide by your request.

Can you buy retroactive car insurance? What does retroactive insurance cover?

The truth is that most reputable car insurance companies will not backdate your insurance for a new policy because, in many cases, it is considered to be illegal and constitutes insurance fraud. Adding insurance the day of an accident throws up huge red flags.

First up, let’s look at why you need continuous coverage on your car.

Why do you need continuous car insurance on your vehicle?

The answer to why you need continuous car insurance should be fairly obvious, and it lies in the very word for car “accident,” which means an unpredictable and unfortunate occurrence. You just never know when something might happen.

There are several different types of car insurance to cover you in different scenarios. Every state has its own requirements for how much insurance coverage you have to have, so make sure you keep at least that amount. A lapse in coverage is never good, but if it does happen, make it as brief as possible.

There are also consequences in many states for driving uninsured. You can count on at least a fine or suspended license, with steep for multiple offenses. Not only that having an insurance lapse is dangerous for you. There are many uninsured drivers in this country, with the Insurance Information Institute estimating one in eight drivers is uninsured.

Some states are worse than others, as you can see below.

Uninsured Drivers by State
State% Uninsured Drivers in StateState's rank for uninsured drivers in the U.S.
New Hampshire9.90%35
New Jersey14.90%14
New Mexico20.80%3
New York6.10%50
North Carolina6.50%48
North Dakota6.80%45
Rhode Island15.20%13
South Carolina9.40%37
South Dakota7.70%42
West Virginia10.10%32
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But if an uninsured driver hits you — and your insurance has lapsed — you’ll have a very expensive out-of-pocket bill.

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Can backdating a car insurance policy be considered fraud?

There are several types of insurance fraud, just like there are several types of people who can commit it. These can be organized criminals who steal large sums through fraudulent activities, professionals who overinflate costs of services or straight charge for services they didn’t do, and the last part: ordinary people.

Ordinary people who want to make a little extra money or who wish to get away with insurance covering something they aren’t obligated to cover make up the biggest group. Getting insurance right after an accident is definitely going to throw up red flags for a fraud investigation.

According to the Insurance Information Institute (III), fraud can be either hard fraud — meaning deliberately faking a claim — or a soft fraud, which is more misrepresenting or padding legitimate claims.

And, according to a study by the Insurance Research Council (IRC), fraud accounted for somewhere between 15 and 17 percent of all auto claims for bodily injury in 2012. That amounts to somewhere between $5.6 billion and $7.7 billion added to pad claims. That’s why the penalties for insurance fraud are so high.

And, yes, backdating can be considered insurance fraud.

Think about it. If you got into an accident while uninsured and then went to an insurer who backdated your coverage, that insurer would then have to pay out the claim. Why would anyone ever have car insurance if they could just wait until they needed it to get a backdated policy?

That’s why you’re going to be really hard up to find an insurance company that will be willing to do this. If they did it without knowing about your incident, you can bet that’s likely to end up in court.

If you didn’t get into an accident, and you definitely don’t have a claim for your insurer, you may be able to backdate the policy if you submit a No Known Loss Letter.

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What is a No Known Loss Letter for retroactive car insurance?

You might be inquiring about backdating because you have had a short lapse in your insurance coverage policy. If that’s the case, you actually might be able to get it.

One of the big caveats that most car insurance carriers will go with when they agree to backdate coverage is what is known as a No Known Loss letter. This is a formal letter that will be composed by the insurance carrier and will be given to you, the insured.

The idea of the letter is for you to sign it, releasing the insurance carrier of any liability of potential claims that may arise during this backdated period of time.

Most consumers need to backdate insurance coverage simply to show proof of insurance. Some may be looking to do it, though, because they want to go through insurance when they got into a car accident a few days ago, with no insurance to cover it.

A No Known Loss letter is a formal letter from the insured to the insurance carrier, stating that there have been no losses over that backdated period of time.

So, how far back can you date your insurance?

How far back can car insurance be backdated?

Can you backdate an insurance policy? Most car insurance carriers will have a cap in terms of backdating coverage. The most that even the very daring car insurance carriers will go is back in time is 45 to 60 days.

Once they get past that window of time, the vast majority, if not all, will simply refuse to backdate the coverage that far.

Knowing this as an insured is very important as you want to know what your limitations are and what is likely to be available to you, should you ever need to actually go down this path.

You as a consumer need to keep your eyes and ears open, do comparisons across the different insurance carriers, and see where you are going to be able to get the coverage that you need, for the period of time you need it.

Backdated coverage is going to be harder to shop for than straightforward coverage policies, but it is certainly within the realm of possibility.

Before making any final decisions on your insurance company, it is important to learn as much as you can about your local insurance providers, and the coverages they offer. Call your local insurance agent to clear up any questions that you might have. Questions to consider asking include, “What is the best coverage plan for me/my family/my situation?” “What are the minimum coverage requirements in my state and what form of coverage do you recommend?” “Do you guys offer any bundle discounts if I take out both my auto insurance and home insurance with you?” and “What is the average rate of insurance quotes you guys offer?”

Before making any big insurance decisions, use our free tool to compare insurance quotes near you. It’s simple, just plug in your zip code and we’ll do the rest!

Get car insurance coverage in place right now to avoid lapses and denied claims. Compare and save today by entering your ZIP code in our car insurance rate tool below.