Consequences of Missed Auto Insurance Payments

Whether the reason is oversight or real money shortage policyholders may have problems paying the premiums in time. In general it is best to try and make the payment to avoid any issues. If this is not possible an early notice of intention should be given to your insurer. They will want to know what is going on. Have you already found another company and switched? Or you are having slight payment problems? They can be more accommodating if they know that you are still with them and you intend to pay.

Quite a few motorists may be under the impression that their insurer will have to write to them and give notice. Unfortunately, this is not the case and companies can cancel the policy as soon as they realize that the payment has not been made. The reason for this thinking may be that health and life insurance companies have to give about a month notice in most states before they can cancel policies due to non-payment. The same rules do not apply to auto insurance.

If a company sent you a notice or reminder it was totally their decision. They are not obliged to do it by most state laws. Generally, they will not wait more than two weeks if they do not receive any communication. And they will probably look at the situation case by case. If you have been missing payments on regular bases they may feel it is time to let you go.

However, they may be a little bit more patient with an established customer with no delayed premiums and great driving history. It depends on their willingness to stretch the rules for you. Most companies would charge a late payment fee of around $10. But they may waive it for you if you ask nicely.

Generally it is best to arrange a direct payment for these important monthly bills. This does help only when you are a forgetful person. Anyway, most companies would insist on such arrangements if they agree on a monthly payment system. Even this solution would not help if you do not have money in the bank.

Missing auto insurance payments should especially be avoided if you have been having financial problems for a while and you still need the coverage. In that case, your credit history would not be great and missing the premium due date would trigger the company to do a credit check at next renewal. It is if you manage to make up the missed one and kept the policy. There is no reason for them to carry out a credit check on an existing customer who has been paying the bills without any problems.

Bad credit history can cause premium increases of around twenty percent. This would not be a good news when you are already struggling to pay the bill. That is why extra care should be taken in such situations. Maybe it would be smart to look at the coverage in time and see if you could bring the premium down to affordable levels and keep paying them.