Several factors can be the cause why you missed out on paying for your insurance policy. Maybe you are financially tight to meet up with the payment or you forgot to make the payment, missing your policy fee has different penalties or outcomes. This, however depends on the insurance company policy and how fast you can control the situation. Here is what happens if you miss a car insurance payment and how you can avoid a lapse when you are on a tight budget.
Although some insurers have a grace period given to policyholders who couldn’t meet up with payment on the exact day, others cancel your insurance, which stops you from being insured.
What Happens If I Miss a Car Insurance Payment
It is very important to take into proper consideration how you will make payments before buying an insurance policy. If you are buying auto insurance for the first time or you are renewing your existing policy, one thing you want to put in place is to ensure that to always make your payment on time to avoid lapses in your coverage.
Insurance companies usually set a date and time by which you are required to make payment for your car insurance. If you miss making this payment, some insurance companies always give a grace period if you are not able to meet up with your payment. The grace period allows you to enjoy your auto insurance coverage for some days after you miss your payment. While other insurance companies will cancel your policy even if you are one day late, you will need to reinstate your policy to get back coverage.
What Happens When You Miss a Car Insurance Payment?
You will experience a lapse in your insurance coverage. Having a lapse in your auto insurance coverage is effective in so many ways than you can imagine so you will need to do your best to avoid it. Here are some of the biggest challenges you can face when you miss a car insurance payment.
- Policy cancellation: One of the dangers of missing your auto insurance payment is cancellation of your policy. Your car insurance company will automatically cancel your policy when you have missed your payment for a long period.
- Rate increment: Your rates may increase when you decide to purchase a new policy than it was because you now have a lapse in your coverage.
- Insurer may fail to renew your auto policy: Some insurance companies will cancel your policy and also never renew your policy. You may never be able to buy an insurance policy from them due to a bad history
- Fines from DMV (Department of Motor Vehicles): Generally, car insurance is a mandatory requirement to drive legally in almost every state. Hence, it is likely you could receive a fine from the Department of Motor Vehicles if you have a lapse in your coverage or if you drive around without auto insurance.
- Bad Impact on your credit score: Missed payments for a long will affect your credit score.
- Registration suspension/License: If you are caught driving around without insurance coverage, your driver’s license and registration will get suspended until you can show valid proof of coverage.
What to Do if you Cannot Afford Your Next Car Insurance Payment
If you find out that you won’t be able to meet is with your next car insurance payment due to financial crisis, we advise that you reach out to your insurance company as quickly as you can to avoid any penalty that comes with late payment.
Also, every insurance company does not run by the same policy, some may give a grace period. While others may allow you to request a different payment deadline so you can meet up with your policy payment. If your insurance payment is set to autopay, you can let your insurance company know that you cannot make with payment, and they might be able to deactivate the autopay for you.
How to Avoid a Missed Car Insurance Payment
To avoid missing your car insurance payment frequently, here are a few things that can be helpful.
- Set up autopay feature: The easiest way to avoid missing a payment is to set up the automatic payment. This will ensure that your insurance payment is deducted from your bank account or charged to your credit card automatically. So, you don’t have to bother about missing a payment.
- Shop around for cheaper insurance coverage: It is very advisable to shop for cheaper insurance coverage if your auto insurance get cancelled and you cannot renew it. Use this opportunity to search for low coverage plans and coverage options.
- Request for a grace period: This is a safe option if you know you will miss paying your insurance fee. Some auto insurance companies may offer a grace period that allows you to make your payment days after your insurance expires without losing your coverage. Contact your insurance company and request If there is a grace period or if they are willing to make a payment extension for you.
- Set remainders: If you don’t plan on missing your payment dates, the best way to avoid this is to set remainders. You can set up multiple days before your D-Day.
Frequently Asked Questions
If my car Insurance get canceled, can I get it back?
If your car insurance is canceled due to missed payment, you can get it back if you reach out to your insurer immediately to reinstate your coverage. You will need to buy another insurance policy. Failure to reinstate your policy with your previous insurer, you will need to shop for another from another insurer.
What happens if your car insurance payment is late?
If you missed your auto insurance payment, you should pay it as quickly as possible. When you know you won’t be able to make your payment, you should contact your insurance company to inform them. If your payment is late, you will need to pay a late fee or your insurance policy will get canceled.
How long is the grace period if you miss an insurance payment?
The grace period for insurance company differs. But the average grace period for insurance companies is 10 days to 30 days.
