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What happens if my car insurance is canceled due to non-payment?

Has it happened to you that you forgot the date of payment of your auto insurance? Or, did your budget bills not work out and you did not pay your policy? Whatever the reason you stopped paying your Salvage title insurance, the insurance provider could drop you without coverage.

The consequences of not making an insurance payment can be far-reaching. After a cancellation for nonpayment, the insurance company may increase your rates and your license may be revoked.

Normally, you have a grace period of between one and 30 days, but you should not be overconfident. It’s best to contact your insurance agency as soon as you realize you’re behind on your insurance payments.

What happens when your car insurance is canceled for non-payment?

As soon as you realize that an auto insurance payment is likely to be or has already been missed, call your auto insurance provider to let them know you’re aware of the situation and ask what you can do.

If you miss a car insurance payment, you will receive a notice of cancellation, this notice may come by mail, phone, or email.

Generally, you will have 10-20 days between the date of the cancellation notice and the date you are no longer covered. After that, your insurance will officially expire and you will no longer be able to legally drive your car.

The options available depend on how long your insurance bill has gone unpaid, your insurance company agreements, and the laws of your state. It is key that you communicate with your insurance company to reach an agreement. Ignoring or delaying the problem could only make your problems worse.

If the payment is not yet

due If your insurance payment is not yet due or has not been processed but you know you will not be able to pay it, you may be able to postpone the payment or extend the due date temporarily while you collect the money.

Depending on your insurance provider, you may not even have to call an agent to do this. The agent you’re working with may have some discretion on how much time to give you, especially if you have a credible reason why you won’t be able to make the payment. You can also arrange a partial payment to keep you insured if your insurance company allows it.

If you’ve been late with your payment by a few days

If you’ve only been late with your payment by a few days to a week, you may be able to reinstate your policy without a break in coverage or other serious consequences, since you’re still in the Grace period. You will have to pay the amount you missed, usually with a late fee. However, make sure to do it soon, as the grace period may vary.

If your auto insurance has been canceled

If your insurance premium hasn’t been paid long enough to cancel your coverage, you’ll need to apply for a new policy. Unfortunately, your rates are likely to go up as car insurance companies charge more for drivers who have had their insurance canceled due to late payments.

Once you have insurance again, you should contact your state Department of Motor Vehicles to update your insurance information and confirm that your registration and driver’s license are still valid.

Long-Term Consequences of Canceled Insurance Due to Late Payments

If your insurance lapses or is canceled, whether due to non-payment or for any other reason, the consequences may continue even after your insurance has been reinstated. Here are some of the possible results of missing your auto insurance payments.

  • Car registration or driver’s license suspension: Almost all states require drivers to insure their cars in order to register them, and many states require insurance companies to notify them if they let their insurance lapse. This could result in the automatic suspension of your car registration or driving privileges, leaving you unable to legally drive. You may even need to carry an SR-22 if you are caught driving without insurance, especially if you cause an accident.
  • Higher insurance prices: Insurance companies like to see that drivers are able to pay their bills on time every month. People who let their coverage lapse, even for a short period of time, will likely see an increase in insurance prices the next time they renew.
  • Credit score can drop: If you owe money on your car insurance and your insurance company turns the debt over to a collection agency, it’s likely to affect your credit score. This may affect your ability to obtain a credit card or loan.

Sigo Seguros reminds you that it is illegal to drive without insurance in almost all states of the American Union, so once you do not have your current insurance, you will not be able to drive.

Do everything in your power to stay insured and protected.

If you want more information on how to avoid having your insurance canceled due to non-payment or if you need a better rate and coverage, call us today.

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