It’s important to pay your auto insurance on time to avoid troubling consequences. Sometimes bills become so stressful they stack up, and it’s hard to pay them on time. Here’s a look at what happens when your auto insurance payment is late.
Each auto insurance company uses its own standards for what happens when customers fail to pay on time. But all insurers conform to certain industry standards. That means you won’t see sudden high penalties. You can find out by reviewing your policy’s terms and conditions.
Auto insurers typically add fees up to $15 for late payments. They must operate within the framework of state consumer protection laws and maintain “reasonable” penalties. Regardless of what the contract says, an insurance company cannot charge excessively high fees.
Too many missed auto insurance payments may result in your contract getting canceled. It usually takes at least three or more missed payments to trigger a policy cancellation. Insurers are usually lenient toward a few late or missed payments.
If several months have elapsed without receiving payment, the insurer is almost sure to drop the policyholder. But it comes down to the insurance company’s unique policy.
In the event you drive during a period of a late or missed payment, you are vulnerable to the fact the insurance company may deny coverage for an accident claim.
Your troubles will multiply if you don’t take care of late or missed payments within a certain time frame. The insurance agency may decide your policy will be “non-renewed” when the term expires. It may also decide to give you the option to renew at a much higher rate. The company views such a customer as high risk or liability that hurts profits.
A driver with a consistent history of late or missed insurance payments raises the odds of paying higher insurance premiums. Perhaps most damaging is that late or missed payments can lower your credit score.
Paying your auto insurance bills on time makes life a lot easier as a driver. To learn more about auto insurance coverage, contact the experts at Mike Leonard Insurance Agency in Texas. We can connect you with our top insurance carriers, including Kemper, MetLife, Nationwide, Travelers, Safeco Insurance, Progressive, and American Strategic Insurance, to find the coverage you need.