What Happens if I Pay my Car Insurance Late?

Say, you did not have enough money in the account and bank refused the next auto insurance premium installment demand. Quite many motorists face with similar problems and want to know what happens to coverage. It isn’t something you can take it lightly and you should remedy the situation pretty quickly because consequences of driving without at least a liability policy in place is very serious in many ways.

Late premium payments are frown upon and upset vehicle insurers and they may charge a fee for it or cancel the policy immediately. There is a slim chance some of them would offer a grace period, which would be maximum two weeks. If there is such a provision worded in the documents they would stick to it and it would protect you.

If not, even though they might not have dropped the coverage yet they may dispute a claim on the grounds that you lost it the moment you missed the instalment. Another legitimate argument is that you only decided to carry on because you have a claim now and such selectiveness cannot be tolerated. In other words, you cannot wait and take only after an accident. This is not how most reputable names would play. They would be clear about the grace period and quick to react otherwise.

One thing policyholders should know is that companies don’t have to offer any grace period for late automobile insurance premium payments in most states. Actually, it is best to assume that there won’t be any and your policy would be canceled immediately upon finding out about it.

Reinstating Car Insurance after Payment Related Cancellations

As soon as you realize that the money isn’t sent you should contact them and discuss possible options. Quite a few of them charge a fee of around $20. Furthermore, some companies may refuse to offer installment plans from the next renewal if you have a history of repeating it. If there is more than one incident, most of them would insist on receiving the full outstanding amount or they will not re-instate coverage.

It is an essential part of your commitments in the whole deal. They care a lot about premium collections and can offer discounts for settling it at the start. So, it is worth considering how you will handle it. If you are not good at managing finances you can make sure by paying in full and avoiding any cancelation. You should check if you would get a little discount for doing so. Usually, they are known to reduce the bill around 5%. In any case, you would avoid the arrangement fees and interest anyway.

Otherwise, you will need to make sure that you always have money in the bank for the dues. Failing could actually get recorded on credit reports and affect the score, which will in turn influence the ability to get 10-20% savings for good credit. It is easy to create a chain reaction when you are habitually late.

Lapse in Vehicle Insurance due to Non-payment 

Last thing you want is to risk being left without coverage. Penalties for driving without it can be quite serious depending on which state you live. Also, you would have to deal with DMV since they would be informed of the policy lapse. You should quickly find out if they would reinstate it. Otherwise, you will need to find another carrier before it is too late. If you are looking for cheap liability only auto insurance you can get a few quotes on our platform.

Usually not dealing with lapses in a timely manner can be worse than allowing it happen in the first place. If you act fast you can pick another coverage from an alternative source. Then, they don’t need to know about your current predicaments. You just get a few quotes and pick one of them to start again. But more than one month lapse can be recorded in Motor Vehicle Record and affect rates.