Paying for your auto insurance premium is a little bit different than paying for your other monthly bills. You should likely give priority to your insurance payments whenever possible. Different insurance companies are harsher than others in regards to late payments. Some insurance companies might cancel your policy after just a day or two when they realize that they never received a payment from you. Other insurance companies are a little bit more lenient. They will give you a period of time to make the insurance payment before it is considered late.
- 1 What Happens If an Insurance Company Cancels My Policy Due to a Late Payment?
- 2 Is There a Grace Period for Late Payments?
- 3 Will I Receive A Notice If My Insurance Company Is Cancelling My Insurance Policy?
- 4 Can You Change Your Payment Plan?
- 5 How Long Does Missing a Payment Stay on Your Car Insurance Record?
- 6 Other Than Insurance Cancellations, What Other Penalties Are There For Missing an Insurance Payment?
- 7 To Conclude
- 8 Resources:
What Happens If an Insurance Company Cancels My Policy Due to a Late Payment?
Unfortunately, it is not good news if an insurance company cancels your policy because of a late payment. If you make a late payment or don’t make one at all and your insurance policy is canceled, you likely will not be able to get your policy reinstated. The insurance company will also note this on your record. This means that you’re likely going to be forced to pay higher insurance premiums in the future. Your insurance premium is solely based on the amount of risk that you carry. Someone who is known for not making their insurance payments on time definitely carries a higher risk. Much higher than someone who is known for making their insurance payments on time, each and every time.
Is There a Grace Period for Late Payments?
Depending on the insurance company that you deal with, there may or may not be a Grace period in place from the provider. If you are a long-time client, it is likely that the insurance company will give you a grace period out of good faith. Generally, the better the track record you have, the better off you are. Even if you know that there is a grace period in place for your insurance company, you are better off ignoring the grace period. Make sure that you make your payments on time. Repeatedly making late payments on your car insurance almost looks just as bad as not making payments at all. If you do this enough times, your insurance company may decide to cancel your insurance policy.
Will I Receive A Notice If My Insurance Company Is Cancelling My Insurance Policy?
Whether or not you will receive a notice regarding the cancellation of your insurance really depends on how long you’ve had insurance for. If you have had insurance for a period between 30 and 60 days, you might not receive a notice. This period of time is known as a trial for insurance companies. During this trial, they are allowed to cancel policies as they see fit. During this time period, they do not have to have a reason to cancel your insurance policy. If you are ever going to miss a payment on your insurance policy, it is probably best not to miss a payment within this timeframe. This is when you are most vulnerable to be dropped as a client from your insurance company. After this timeframe, you can expect to receive a notice from your insurance company if they are canceling your policy.
Can You Change Your Payment Plan?
If the reason you are questioning whether you can make an insurance payment is due to an insurance payment plan, you should talk to your insurance provider. Your insurance provider might be able to offer you a different payment plan than what you currently have. Although some payment plans might cost you a little bit more money due to bank fees, it might definitely be worth switching. It is important to find something that works for your budget. Not everyone gets paid at the same time and sometimes the time of the month that you get paid does not work well with the date your insurer takes money from your account. It never hurts to ask your insurer for some leniency.
How Long Does Missing a Payment Stay on Your Car Insurance Record?
Insurance companies go back different lengths of time when they look at your driving record. There is no set amount of time for where missing a payment will be removed from your record. Some insurance companies look back as little as three years to see what is on your record. Others will look back as far as 10 years to see what you been up to. Non-payment can certainly affect your long-term car insurance payments and it will most definitely affect your short-term car insurance payments. Generally speaking, the longer it has been since you missed the payments, the better.
Other Than Insurance Cancellations, What Other Penalties Are There For Missing an Insurance Payment?
Although cancellation is the worst case scenario that you are likely to come across, there are other penalties that an insurance company can put in place. Insurance companies can put in NSF fees into your insurance policy. In addition, you also risk being deemed a high-risk driver by insurance companies. This means that once your policy is over, you will likely have a tough time finding a reasonable quote for auto insurance. You might have to end up getting insurance through a high-risk insurance company. Another bad scenario could involve you having a lapse in insurance coverage. If you happen to be caught without insurance, you could face fines and you could even be hit with jail time and a license suspension.
Although money might be tight, it is extremely important to try your best to make your car insurance payments. If you’re having a hard time making your payments, you should talk to your car insurance provider. If your insurance premiums are just too high to afford, you could attempt to switch providers. Some will certainly offer you a larger discount on insurance. In most cases, you are actually better off getting some kind of a loan if you know that you’re going to miss a car insurance payment. The consequences for missing a payment are just too high and they can cost you a whole lot more money than a loan ever could and it is just not worth doing.