As with any recurring bill, you must pay your auto insurance premium regularly or your insurer will no longer cover you. But unlike a missed phone bill, the consequences of missing an insurance payment can be far-reaching. after a cancellation for non-payment, the insurer may increase your rates and your license may be revoked.
You’ll generally have a grace period of between one and 30 days, but you shouldn’t count on it to protect yourself. It is essential that you contact your insurer as soon as you realize you are behind on your insurance payments.
what to do if you can’t or won’t pay car insurance
As soon as you realize you’re likely to miss or have already missed a car insurance payment, call your insurance company to let them know you’re aware of the situation and ask what you can do next. The options available to you will depend on how long your car insurance bill has gone unpaid, your insurance company’s policies, and your state’s laws. But no matter the details of your situation, it’s key that you contact your insurance company to reach an agreement. ignoring or delaying the problem will only make your problems worse.
if the payment is not yet due
If your auto insurance payment isn’t yet due or hasn’t been processed but you know you won’t be able to pay it, you may be able to postpone the payment or extend the due date temporarily while you get closer with the money. depending on your insurer, you may not even have to call an agent to do this. For example, Geico allows customers to delay self-pay bills for up to nine days through the company’s mobile app.
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The agent you’re working with may have some discretion on how much leeway to give you, especially if you have a credible reason why you won’t be able to make the payment. They can also arrange a partial payment to keep you insured if your insurance company allows it.
if you are late on a payment by a few days
If you’ve only missed a payment by a few days to a week, you may be able to reinstate your policy without a break in coverage or other serious consequences, since you’re still in the grace period. You will have to pay the amount you missed, usually with a late fee. however, be sure to do so promptly, as the grace period may vary.
if your car insurance has been cancelled
If your insurance premium has not been paid long enough for your coverage to be cancelled, you will need to apply for a new policy. Unfortunately, your rates are likely to increase as car insurance companies charge more for drivers who have had their insurance canceled due to late payments. your previous insurer may not even offer you any insurance, in which case you’ll need to go with another company, such as a non-standard insurer.
It’s illegal to drive without insurance in almost every state, so once your insurance ends, you won’t be able to drive. the longer you go without coverage, the higher the price increase when you buy a new policy. a lapse of 15 days could result in a lapse of 8%, while a lapse of 45 days could result in a jump of 24%.
after you have insurance again, you should contact your state department of motor vehicles (dmv) to update your insurance information and confirm that your registration and driver’s license are still valid. You should also make sure you don’t owe your old auto insurance company money. You can eventually turn over any overdue debt to a collection agency.
what happens when your car insurance is canceled because you missed a payment?
If you miss an auto insurance payment, you will receive a notice of cancellation required by law from your insurer. This notice may come by mail, by phone, or by email.
Generally, you will have 10-20 days between the date of the cancellation notice and the date you are no longer covered. the exact amount of time differs by state. After that, your insurance will officially expire and you will no longer be able to legally drive your car. In some states, letting your insurance lapse also voids your registration, either right away or a few weeks after your insurance lapses. but no matter where you live, the longer you wait before rectifying the problem, the greater the consequences. so be sure to contact your insurance company right away.
long-term consequences of insurance cancellation due to non-payment
If your auto insurance lapses or is cancelled, whether for non-payment or for any other reason, you will likely face financial ramifications of some kind. the consequences can continue even after you have reinstated your insurance. These are some of the possible results of not making your car insurance payments.