What Happens When You’re Late On Your Car Insurance?

  1. 0 POINTS
    Donny Moore
    Owner Agent, Moore Insurance Advisors TWFG, Illinois
    It is always best to make payments in a timely matter. But, when a problem arises, or you forget, their is a 30 day grace period in which you have time to comply, and catch up your payment. After the thirty day grace period your policy goes into cancellation status, and you have no coverage. You are still liable for the extra thirty days of premium. After the thirty day grace period expires, it is up to the carrier, on whether they will will reinstate the policy or not. Most will, with a payment to catch up the account. Please be careful to never let a policy lapse for nonpayment, as this will affect your future rates and insurance score. www.mooreinsuranceadvisors.com
    Answered on July 2, 2014
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  2. 14231 POINTS
    Tom Sheehan
    Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
    Late payments can possibly put you at risk of having no coverage so it is always a good idea to be on time.  Talk to your Insurance Professional about the specific terms and conditions of your policy, but in some cases, companies include grace periods in their billing plans.  However, they can also apply late fees for each late payment.  This can add up.  Say for example a company applies a $10.00 late fee for each late payment.  If a person is paying monthly, that adds $120.00 a year to the cost of their car insurance.  That can be a significant and avoidable increase over the agreed upon term premium.
    Answered on July 2, 2014
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  3. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! Typically, if you are only a couple of days late, not much. The problems start when you are more than 20 days late, or are frequently late with your payments. Once your payment gets to be 30 days late, you are in serious risk of the policy cancelling, and then you are an uninsured driver, with all the penalties that go with that. You will also have trouble getting reinsured, and can expect to pay a much higher premium for a while. Frequently being late can have an adverse effect on your credit rating, and that means you can expect higher interest rates on your credit cards or no credit at all. I hope that helps, thanks for asking!
    Answered on July 2, 2014
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  4. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Auto policies normally do not provide a grace period.  When the policy is not renewed coverage ceases on the expiration date.  Normally the company will issue a letter advising you of the date that coverage will cease.  If that date is past you expiration date, you are responsible to pay the premium for that period of time, even if you chose to not renew the policy.  The company may extend a period of time for you to “reinstate” coverage, but a cancellation letter is probably being sent at the same time.
    Answered on July 2, 2014
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