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What To Do When Missing a Payment on Car Insurance

Here's what you need to know...
  • If you realize you missed a payment, contact your insurer immediately. Most offer a five-day grace period
  • If your payment is missed by more than five days, you may have your coverage canceled
  • Automatic payments are an option to make sure you don’t forget a payment
Missing a car insurance payment is not a good thing, but there is a possibility it can be corrected. Most people have to deal with unexpected situations at some point in their adult lives.

When they occur, you may be faced with difficult decisions regarding your car insurance payment.

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If you have to sacrifice a car insurance payment, it had better be for a good reason. Most states require insurance for all vehicles on the road.

In a case where you are just going to be late with your payment, your insurance company may be able to help you. Some offer a grace period of five days as a practice. If you need more time you may have to look at other alternatives.

What if I am going to be more than five days late with my car insurance payment?

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Five days is the average grace period on most insurance policies. If you are a seasoned policyholder with a good payment history, you may be able to make a phone call.

Your agent wants to continue your policy if you are a good customer. A good motor vehicle record or MVR is also a compensating factor.

The agent may be able to charge you a late fee and continue the policy.

In many cases, after the grace period, the policy is canceled. Any payments submitted after cancellation are returned to the policyholder.

What if I am unable to make my car insurance payment at all this month?


If you have to skip a car insurance payment you may have to cancel your policy. During this time you may be able to purchase short-term insurance that will allow you to purchase coverage by the day, up to 28 days.

This may be your only option unless you park your car or truck and carpool or take public transportation temporarily.

Once you are able to reinstate your policy with your previous car insurance company, most will require another down payment to resume coverage.

If you have a good rapport with your car insurance carrier, they may make your policy retroactive. This means your policy period will not show the interruption of coverage.

Another condition, and perhaps most important, is the absence of any accidents since your last day of coverage. Your insurer may not be able to make your policy retroactive if an accident occurred since your last date of coverage with them.

If you were driving without proper coverage or while with another carrier, everything changes with your previous carrier.

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Is there a way I can avoid missing my payments?

Most insurance companies, especially the larger ones, offer automatic payments.

To sign up for this service, you must give the insurance company either a credit card number or your checking account information. Then, when you payment is due, the amount is automatically charged to your credit card or debited from your bank account.

Car insurance companies usually start the automatic payments several days before your payment is actually due. This is to allow you to make other payment arrangements in case your automatic payment is denied or returned.

Most insurance companies also permit you to cancel your payment arrangements at any time, so if you find having the premium payment automatically deducted or charged is not as effective as paying the bill on your own, you cancel the service.

Can I change my monthly payments to different amounts?

Hand of driver with a car key. Auto rent and sell.

Yes, it is possible to change your monthly payments, as long as the total amount you pay covers your entire premium. It is best to speak with your insurance agent or company, but many carriers can set up monthly payment plans.

These plans usually include up to six payments, allowing you to spread your premium out over that period of time. However, keep in mind that each payment installment is likely to carry a fee of up to $5.

Although having fewer payments will equate to a higher payment amount each time, you can save money on installment fees.

However, if you set up automatic payments, some insurance companies will waive the installment fee, even if the payments are set up over six months.

What if my car insurer receives my payment too late to cover my accident?

If you sent your insurance premium to your carrier, and it was received a day after cancellation, you may have a dilemma to deal with. You may be held responsible for damages if you were at fault in an accident.

This is a possible scenario if you opt to send your insurance premiums by mail.

Most major carriers have websites that will allow you to make your insurance payment online.

You can have payments drafted from your checking account. Some companies prefer that you set up an automatic draft. That way your payment is drafted monthly on a designated date automatically.

I missed my payment to my car insurance company with no grace period. What do I do?

Couple with papers stressed over bills.

Missing premiums to a company with no grace period will mean having to start with a new down payment. There are many companies who have this policy.

They are also usually efficient about reporting a lapse in coverage to your state DMV. If you have a lapse in coverage a few times too many, you run the risk of having your license suspended in some states.

Sometimes it may seem easy to sacrifice the car insurance payment when times are tough and more immediate needs take priority. There are ways to make your premiums more affordable so that you do not have to take a risk that could cost you your license.

Some suggestions are:

  • Customize your policy to eliminate unnecessary cost
  • Increase your deductible
  • Take a defensive driving course
  • Combine your car insurance with your homeowner’s policy
  • Pay more on your initial down payment
  • Shop around for a cheaper policy

If your insurance company does not reward you with a shrinking deductible or some kind of incentive for a good driving record, maybe it is time to start a new search.

To start your comparison search for cheaper car insurance rates, simply enter your ZIP code here to get started!

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