How it works
What happens after a missed payment depends on your state, your policy and the type of payment:
- Renewal premium: if the premium for a new term is not received by the due date, the policy can simply end when the current term expires.
- Payment during the term: to cancel a policy mid-term for nonpayment, insurers generally must send written cancellation notice first, and the notice rules vary by state.
- Company practice: some insurers will accept a late payment, and others will not. Accepting late payments can also lead to a higher renewal premium.
Do not count on extra time. Pay by the due date on your bill, and if a payment is late, call your insurer to confirm whether you are still covered. A lapse in coverage can lead to fines, registration or license trouble and higher prices when you buy again.
Related terms
Sources
- Wisconsin Office of the Commissioner of Insurance, Automobile Insurance FAQ no required grace period, termination when premium is not received, cancellation notice
- NAIC, A Consumer's Guide to Auto Insurance some insurers do not accept late payments, cancellation notice varies by state
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