Life happens, and payments get missed sometimes. It could be as simple as switching bank accounts and forgetting to notify your insurance company, an emergency happens, and you do not have the funds in your account, or it simply slips your mind. No matter the reason, it’s important to know what happens if your insurance is cancelled for non-payment.
If you miss a payment on your phone or credit card bill, it may not have serious repercussions. However, non-payment of your home or auto insurance can have severe consequences for you with your insurance company, and your car insurance rates will increase, and insurance coverage may even be cancelled.
Non-payment is taken very seriously by insurance companies. It can impact your ability to get affordable insurance now and in the future. Every company has different rules regarding non-payment. It normally just takes a couple of missed payments to result in cancellation. A cancellation for non-payment will make it extremely difficult for you to get affordable insurance again.
What Happens if Your Insurance is Cancelled for Non-payment: Frequently Asked Questions
Tips to help prevent your insurance from getting cancelled for non-payments
· If you think you are going to miss your monthly payment, call us at least 10 days in advance of your withdrawal date to let us know. In most cases, we will be able to assist by asking your insurance company to move your payment to a more suitable date.
· Set a monthly payment reminder in your phone to remind you about your payment
· Set up monthly payments on your credit card – less likely to have missed payments due to insufficient money
· Have an overdraft allotment on your bank account to avoid having insufficient funds
How Do Missed Payments or Cancellations Affect My Insurance?
Your insurance being cancelled for non-payment can affect you in several ways:
· Cancellation: Your insurance company cancels you for non-payment, you could have a lapse in insurance. It is illegal to drive without insurance. This is a criminal charge.
· Increased Costs: You will face a premium increase on renewal or with any new insurance company.
· Insurance History: Non-payment stays on your insurance history record for 10 years so that any new insurance company will know about of your non-payment history. This affects your insurance record and cost of insurance for a minimum of 3 years and up to 10 years, depending on the insurance company.
· Driving Record: If you have accidents or tickets, and a cancellation for non-payment, you are considered a “high risk” and will need to buy insurance through the Facility market which is a much, much higher cost.
· Additional Fees: NSF Fees will be charged by the company for any missed payment.
· Payments: If you are cancelled for non-payment, any new insurance company may require you to pay your insurance premium in full up-front.
· Outstanding Premiums: If you are cancelled for non-payment and switch to a new insurance company, the balance owing to your prior insurance company must still be paid. If not paid, you will be sent to collections, which will impact your credit rating. Also, any new insurance company may not be willing to insure you until your outstanding bill is paid in full.
We are here to support you. We want to help you maintain a competitive price for insurance and avoid all the unnecessary hardships that come from having your policy cancelled for non-payment.