Everyone goes through a tough financial spot at some point in their lives and often times bills are pushed back into the “next month” category. As with any type of bill there are consequences that go along with sending in a payment in late. Even if the payment is made only a couple of day’s late, insurance companies have the right to cancel your policy and in some cases cause you high bills to get your policy restored.
Insurance companies are typically very strict with payment due dates. They must be received before the actual due date. Once that due date has passed they legally have the right to terminate contracts.
However, must companies will give a customer some wiggle room, once or twice. Once paying the bill becomes a habit, they waste no time kicking you off their policy.
Car insurance differs from other types of insurance, in the fact that they do provide “grace periods”.
Getting kicked off a policy can often steam roll into much larger problems for people looking for insurance. Once you have had a contract terminated for late payments, most insurances will not place you back on one of their policies without paying the balance of the entire term. This can sometimes be a big chunk of change out of a customer’s pocket.
Consumers can always go looking for a different car insurance provider, but this is often difficult once you’ve been given the boot by one company.
Insurance companies will always check into your past car insurance history and look for gaps in coverage or outstanding balances with other agencies. If a history of non payment is evident during these checks, they have the right to refuse to provide you with insurance. If they do choose to provide insurance to you, they often do not allow payment plans. This means that you will have to pay a large premium to be covered for 3 – 6 months at a time. Instead of being billed monthly for a fraction of the cost.
Most insurance companies offer their customers automatic bill payment which takes the amount directly out of your bank account at the same time each month. Having this feature for customers helps put an end to late payments. It also helps to force you into knowing that the payment is coming out.