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It is not uncommon for many people to run into difficulties with their bill paying. Some individuals simply forget. Others forget to budget appropriately. Then there are those who don’t have enough to pay them. While all bills are important, one the most important is the insurance premiums.

There are several things that can go wrong with paying insurance premiums.

Automatic Payments


A lot of people have difficulty remembering to pay their bills. They will set up auto withdrawals at their bank. Many Insurance companies will accept this form of payment. It doesn’t entirely solve the bill-paying problem. The insured has to make sure the funds are in the bank account. It is to cover the payment. Some banks will give the client a day to get the money deposited. It is a courtesy when there are not enough funds in the account. There may not be enough money when the Insurance Company is withdrawing. Then there are some people who have an overdraft service on their bank account. It means if there is not enough money in the account the bank will cover it. Then the bank charges an extra fee for this overdraft protection.

If the money is not deposited the bank will reject the withdrawal.

The bank notifies the Insurance Company of the rejection of the withdrawal.

Payment By Check

Other individuals like to use traditional check payment methods. When they receive a notice that the Insurance is due, they will mail a check. It is also an acceptable method. However, if the check does not clear, then the Insurance company doesn’t get their money. The bank will also levy a non-sufficient funds penalty against the individual.

Not Making Any Payment

Another problem that can arise is just not making the payment at all. Sometimes this is an oversight. The Insured forgot to make the payment. In other cases, the insured did not have the money to make the payment. Either way, the situation is now non-payment of insurance.

What Happens if they Cancel Your Insurance

No matter what the reason the Insurance Company views the non-payment as being serious. They now have the ability to cancel the insurance. Basic insurance is mandatory in Canada. Cancellation of the insurance means the driver can no longer drive the car. Some people feel that insurance cancellation is not a big problem. They assume they can just go to another Insurance Company.  However, this could be a problem.

Insurance Companies will make a record of the non-payment of the insurance. The driver’s insurance record will show this. When the individual goes to another Insurance company, they have access to this record. If they see more than one non-payment record, they may refuse to insure the driver.

Now that you have a record of non-payment this will increase your premiums. Unfortunately, this will probably be for the next three years.

Why is Non-Payment Such a Big Deal

Insurance Companies have a tremendous task of keeping track of each client. Non-payment can create a lot of extra work for the Company. Plus, in turn, costs them money. Insurance Companies are in the business of making money. Also, they are not going to take on unnecessary expenses. That is what a non-payment of insurance can amount to.

There is a concern that if you have done this once you will most likely do it again. Some Insurance companies are more forgiving than others. They will allow one missed payment. They will give the benefit of the doubt. Perhaps the insured did not receive their notice that payment was due. They will make a note of the non-payment on the client’s insurance file. If another non-payment incident occurs, then there will probably not be a third chance.

Insurance companies track all kinds of statistics very carefully. There are many different kinds of statistics. Some of these pertain to vehicle insurance.

It includes the non-payment of Insurance. There are statistics that show non-payment insurance clients are more likely to be involved in an accident that is their fault. With this type of statistic, they are far more cautious about who they insure.

What Happens If Your Car Insurance Payment is Late?


When you miss a payment, the insurance company will notify you of the missed payment. From the date of this notice usually, you will only have thirty days to make the payment. After this, the policy won’t be valid. Now you will have to find other insurance. It can be a bit more of a challenge as the next insurance company will want to charge higher premiums. Insurance companies look at the individual as high risk. Even though this is not a result of an accident.

You may still have your old insurance slip. Cancellation of the policy means the policy is no longer valid. If you are driving without insurance, then you are breaking the law in Canada. You could end up with a hefty fine that could be $5,000 or more if caught. The amount will depend on whether this is your first offense. Suspension of your driver’s license is another risk.

If you happen to get into an accident with no insurance, this is a serious matter. You will have all the costs of the accident to pay. Driving without an insurance fine is possible.

What Will Happen If You Don’t Pay Your Insurance?

non payment

If you don’t pay your insurance, it will be canceled. Now you will have to get new insurance. Every Insurance company has its own rules and guidelines. Some are stricter than others when it comes to non-payment. There are some Insurance companies that will not raise the rates too high. As this applies to those with a non-payment record. It now means that the insured needs to shop around for new insurance. The focus will be on who is offering the best rates based on this situation.

It is important that Insurance payments are not missed. If possible paying the entire premium for the year is best. However, if this is not possible then make sure that you are able to meet your payment obligations.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.