It happens all of the time – consumers miss the due date on a bill. In some cases, you can get away with it as long as you get current quickly. With car insurance, though, there could be serious consequences if you are not careful.Get today’s insurance rates.
You have to carry proper car insurance – it’s the law. Not paying your bill on time could result in a lapse in coverage, which could lead to even worse consequences down the road.
Paying Within the Grace Period
Some, not all, insurance companies have a grace period on their insurance due date. This may mean that they don’t charge you a late fee during that time or that they will still cover you as long as you pay within the grace period.
If you are in the habit of paying your bills late, you should know this grace period well. If you pay outside of this period, you could find yourself without insurance.
If you pay outside of your policy’s grace period or it doesn’t have one, you stand to lose your coverage. This is because you pay car insurance for future coverage. For example, if you pay your car insurance monthly, your insurance due on March 1st would cover the month of March, not the month of February.
What this means is insurance companies won’t send your account to a collection agency. They didn’t provide a service that they have yet to receive payment. However and possibly worse, they will cancel your coverage because they did not receive payment. This leaves you liable for serious financial damages if you are in an accident. It also leaves you in trouble with the law if you get pulled over.Get today’s insurance rates.
Paying Higher Premiums on Car Insurance
Even if you are able to secure new car insurance, be prepared to pay higher premiums. You are now a higher risk because you had a lapse in coverage. The insurance company realizes that you don’t pay your bills on time as a result of your recent history. They may require that you re-establish yourself by paying the higher premiums for a short amount of time. It’s in your best interest to make those premiums very timely so you can reduce your premiums once again.
Depending on the state you live in, there could be serious legal penalties if you are caught without car insurance. The penalties range from fees paid per day to license or registration suspension. This is usually only if you go for a long period without insurance, but is it worth the risk?
Rather than risk late payments, set up ways to make sure your insurance is paid on time. Most insurance companies allow you to prepay for 6 months of insurance at a time. If you have the money, this may be the best option. This way you only have to think about the payment two times per year.
If you have to pay the insurance premiums monthly, consider setting up automatic payments with the insurance company or your bank. This way you know the bill is paid on time every month. It reduces the risk of human error and you forgetting to make the payment on time.
Risking your car insurance is not worth it. If you pay it late often enough, it could end up costing you more in the end. This should be a decent motivator to help you get your insurance payments in on time as the financial and legal consequences can be quite hefty.Get today’s insurance rates.