How Long till Auto Insurance Cancelled if Premium Unpaid?

You have entered into contract with the provider when you took out a policy. In that car insurance company will compensate your losses and you will make the payments in due course. If you paid the premium in full you have satisfied the requirements right at the start. However, you may have set up installments instead. In which case, there is a chance that the next one may slip through unpaid.

Obviously carriers wouldn’t be happy to learn that you failed to send in the installment and meet your obligation. Equally, they come to learn that these things happen and every company has their own way of dealing with these situations. Missed payments affect credit score too.

Now how long time you have got before they cancel coverage isn’t a straightforward question to answer. It all depends on how quickly the company reacts, if they are willing to communicate with you and give you time to respond and if there is a period of goodwill at all. Legislations and common practices may vary.

Some states legislate that insurers have to inform their policyholders of missed payment and give them time to settle. This could be between 10 to 30 days depending on the company and state. However, some states choose not to get involved in insurance grace periods and let them decide. That is why you cannot count on a grace period and expect to remain covered even though you didn’t keep up with the premium. But there is a high chance your policy won’t be cancelled immediately. However, you should contact them as soon as you realized it isn’t paid.

Providers would inform DMV once a vehicle insurance policy lapses due to nonpayment. Since you have to keep it up by law, DMV will write to you for an explanation or proof. Lately authorities are on top of these things and as a result they catch more and more drivers and enforce the law.

If you didn’t make up the arrears and somehow the notice period is over current carrier may agree to re-insure the car. In most cases, they will issue you a new coverage. If you don’t want to have a lapsed period on record you can ask them to backdate the policy. Normally, backdating aren’t allowed but in this case they may agree to it providing you confirm you didn’t have accident in that period.

Changing Insurers: It is best to inform the provider if you stopped the installment because you bought another one. Otherwise, they would naturally keep billing you and expect you honor them. You may be able to get out of it when you prove that you had another coverage in place already. But it is best to inform previous carrier when you switch to avoid getting bills. In any case, you shouldn’t risk it until you have a replacement in place.

Missing the premium and not remedying the situation quickly will leave you exposed. Regardless of you knowing it is lapsed or not, driving an uninsured car is a crime. If you know that you missed it you shouldn’t drive until you make sure the issues are sorted and you have coverage one way or another.

Consequences of driving without coverage are serious. Your license may be suspended, vehicle may be impounded and license plate taken away until you come back with insurance and settle the fine. You may also be prosecuted, especially if you cause an accident.

Furthermore, you would be on your own to meet all the damages to your vehicle and the damages and injuries you caused to others if you ever get into accident. You don’t only comply with the law. Buying an auto policy can help you in many ways. That is why you should not only purchase a suitable one for the automobile but also make sure it remains in effect.

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