Many consumers mistakenly believe there is a “grace period” for making insurance payments after the due date. This is not true when it comes to auto, home and business insurance! In fact, paying your insurance bill after the due date can have severe consequences on your credit, your rate and most importantly, your insurance coverage and financial well-being.
Consequences of a missed payment
- Removal from a payment plan
- Late fees
- Increase in premium
A lapse in coverage can make it difficult to get a new policy because it reflects poorly on you. Insurance companies base premiums on perceived responsibility and risk. Not having insurance suggests you are less than responsible and could subject you to higher rates, classification as a “high-risk driver,” or even denial of coverage.
In addition to the consequences above, the most severe is the possibility of a claim while uninsured. For example, if you let your car insurance lapse and you drive uninsured and cause an accident, you are financially responsible for damages and injuries that occur. These costs can add up quickly and be devastating to your finances.
How many times can you get your insurance reinstated?
Getting your policy reinstated once is not a guarantee. Multiple reinstatements are even more difficult. The ability to retain coverage after receiving a cancellation notice varies by insurance carrier.
How to avoid being cancelled
Don’t leave it to the last minute! Try to pay your premiums before the last day. It’s a great idea to put reoccurring reminders in your phone to pay your bill on time.
Pay your policy in full. Some carriers offer a pay-in-full discount, which can result in significant savings.
Lastly, almost all insurance carriers offer electronic funds transfer (EFT) which will automatically deduct your payments on the appropriate due date. By setting up EFT, you can be assured you won’t have a lapse in insurance coverage.
We’re here to help
As your insurance agent, we’re here to provide assistance on your insurance program. Visit the “Make a Payment” page on our website. We provide a list of our partner carriers and multiple ways to pay our bill. Contact us at Neckerman Insurance to be set up on EFT or for more information about your billing options. This will save you time, money and hassle going forward.