What Happens if you Miss an Insurance Payment?
What happens if you miss an insurance payment? Some bill payments should not be missed and insurance is one of them. The results of not paying your insurance bill can be dyer. Your insurance provider may cancel your policy, you could have your license suspended, and you would be liable for all costs resulting from a vehicle accident during the lapse in coverage.
Auto Insurance Protects All Drivers
Accidents involving a motor vehicle can be quite costly. The damage to the car as well as medical expenses for injuries to the driver and passengers can run into the tens of thousands of dollars. Consider all that can happen if you miss an insurance payment.
If your policy is canceled because payment was not received, the insurance company might not honor your claim. This can leave you personally responsible for all payments for vehicle repairs as well as medical costs for anyone who was injured. In most states, liability insurance is required and the penalty for driving without proper coverage is severe.
It is absolutely vital that you keep your car insurance coverage in force at all times. This type of protection means that huge monetary costs resulting from an accident are fully covered.
The ramifications for not paying insurance can be more severe for an expensive car.
Lapses In Coverage
Most insurance policies are written for a six-month or annual period. The payment plans vary, but in most cases vehicle owners must pay a monthly premium on or before a certain date. Although many insurance providers offer a short grace period, policyholders are encouraged to sign up for automatic payments.
Most insurance companies will set an automatic payment date about one week before the premium is actually due. This allows for an alternate payment plan should there be a problem with electronic payment acceptance. A six-month or one-year policy usually expires at 11:59PM local time on the last day of the term period.
An insurance company may consider a non-payment as a lapse in coverage. There may be a fee for continuing auto insurance coverage acknowledgement, but in some cases the insurance company may decide to cancel the policy altogether. A payment made just one day too late may be considered a lapse in coverage.
Avoiding Late Payments
You can always change the date each month your payment is due. Insurance companies are happy to accommodate policyholders who need to pay their bills on a certain day each month. It is important to make these arrangements before the next due date.
Some insurance providers will also arrange for the remaining payment amount on a six-month or annual policy to be reorganized in a way that benefits the customer. If you owe a single payment to cover the next three months, your provider may allow you to spread the payment out over the entire 90 days.
Possible License Suspension
In some states the law allows for the suspension of a driver’s license if proper insurance coverage is not maintained on a vehicle. You may have to report a vehicle as idle, turn in the license plates or pay a daily fee in order to keep you driver’s license from being temporarily suspended. The motor vehicles department in your state has complete information on the consequences of owning a car without required liability insurance.
It can be unpleasant to think about what happens if you miss an insurance payment. The consequences are far more severe than most people realize. Although there are many ways to save on insurance premiums, skipping a payment is not one of them. That is why drivers should always make their auto insurance payments on time.