Why You Should Put Your Insurance on Autopay

 In Archives, Best Practices

Late Insurance Payments Harm Coverage

Paying your insurance bill late could harm your coverage and pricing.

As is the case with many other forms of monthly bills, not paying your car insurance can be a serious and costly mistake. While people struggling with finances may opt to go without certain types of insurance for a period, many people simply forget to pay or end up paying later than the due date.

Even though late payments aren’t a major offense, it can have consequences that impact your coverage, future payments, and relationship with the insurance provider. Of course, we all make mistakes. Forgetting that a bill is due is understandable, but some companies interpret your lack of payment as harmful neglect.

Here’s what you could face when you pay late.

Possible Cancellation

Your insurance company may cancel your policy if they see fit. If you have a habit of not paying or if you’re not responding to any of the company’s warnings, you could risk losing your auto coverage. Without insurance, you will likely be breaking the law in most states, and setting yourself up for future financial failure. If your policy is canceled, it will be difficult to reinstate your account with prior lapses. Some insurance companies will consider even two late payments over a three-year period ineligible for reinstatement.

Higher Fees

With a late payment often comes a late fee. You may face multiple charges until you pay the due amount. Furthermore, if you are dropped from coverage, if you continue to pay late or miss payments, you could be deemed untrustworthy in the insurance world, preventing other companies from insuring you. Any court or legal fees associated with not carrying insurance will also have to be paid in due time. If you get into a car accident or are pulled over without insurance, then you will have to pay for the expenses out of pocket, on top of being fined.

The best way to prevent any possibility of being late on payments and threatening your coverage is to set up autopay, which pays the insurance bill automatically every month. To ensure that you are up to date with insurance bills, speak to your agent at American Advantage – IFS Inc. today.

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