We know life can get a little hectic at times — important dates are forgotten and due dates are missed. And while your friends may be forgiving if you wish them a ‘happy birthday’ a day late, it’s not the same when it comes to missing your car insurance payment.
Here at H. Levenbaum, we want you to understand the importance of paying your car insurance on time, which is why we’re answering some big insurance questions along with offering some tips to help you stay on track.
What happens if I don’t pay my bill on time?
It’s the first of the month and you forgot to put your rent check in the mail. Usually, you can call up your landlord, apologize, write the check and all is good. Insurance companies, however, have stricter billing rules. But, insurance companies aren’t so forgiving when it comes to your car insurance. If you don’t pay your car insurance bill on time, the first thing that will happen is late fees. Even if it has only been a day or two, the insurance company can charge you additional fees for making a late payment. These fees can add up — late fees, cancellation fees, and reinstatement fees in addition to the monthly billing fee, it can all be expensive.
If your account is not brought up to date, your insurance company has the right to cancel your coverage, even without your knowledge. If this happens, you are no longer covered and driving without auto insurance is illegal in all 50 states.
What happens if my coverage is canceled?
If you don’t make your auto insurance payments and the insurance company decides to cancel your coverage, you are officially uninsured. If you choose to continue driving, which is against the law, there can be serious consequences. In the event that you are pulled over, driving without insurance can lead to fines, suspension of your license and registration, impoundment of your vehicle, and even jail time. If you were to get into an accident while driving without insurance, you could also be liable for any medical or legal bills incurred, not to mention repair costs for the damaged vehicles.
What happens when I apply for auto insurance after a lapse in coverage?
For someone who didn’t make payments on time and had their policy previously canceled, there are consequences when you go to get reinsured. You are now labeled as a higher risk driver, which means that you could see an increase in your insurance premiums. Even if you choose to be reinsured with a different insurance company, your lapse in coverage is reported to the Massachusetts Registry of Motor Vehicles, and any insurance company can access these records.
How do I avoid a lapse in coverage?
The most important step you can take to ensure that you don’t miss a payment or have your coverage canceled is to plan ahead. Before buying a new car, make sure you are able to afford insurance payments in addition to other costs related to your car, like gas, parking, and routine maintenance. Remember, newer vehicles cost more to insure, which is something to keep in mind when car shopping and calculating your budget.
You can also set up automatic payments for your insurance policy. This way your payment is always on time and you won’t have to worry about a lapse in your coverage. Insurance companies often do not charge a billing fee for automatic monthly payment. You should also talk to your independent insurance agent about paying your bill annually. You’ll have fewer payments to remember, plus you may be eligible for discounts if you go this route.
Having a local agent to help you find the right coverage for your needs and your budget is key. At H. Levenbaum, we specialize in helping individuals, families, and businesses find an auto insurance policy that gives you the coverage you need at a price you can afford.
If you have questions about the consequences of not paying your auto insurance on time, or would like to speak to an agent about a new or existing auto insurance policy, we’re happy to help. You can visit our website or call (617) 825-3900.