When a person is late on their automobile insurance payment, there is a good chance that they could expect to be charged late fees or face other consequences. Insurers typically take late or absent payments very seriously, and if a premium for coverage is not received when due, a lapse in protection will occur. This means that between the time when the payment was due and when the insurer receives payment, the policyholder is not covered under the policy. In some states, such as Louisiana, providers are required by law to report any lapse in coverage that may occur, resulting in a series of fines, which can be more expensive than the amount owed to the carrier and also become a hassle to resolve the issue with the state.
Consumers should also note that are not required to offer a grace period for premium payments and automobile insurance coverage will cease for non-payment. In addition, a reinstatement fee may also be charged if the motorist chooses to continue the policy. The most dangerous part of having policies lapse is the fact that the vehicle is uninsured and if the motorist takes the chance and operates the automobile, any incidents that may occur would be uncovered and could result in financial hardship due to expenses that can arise, fines and even jail time. During a lapse, a motorist should refrain from driving until the issue is resolved.
According to the West Virginia Offices of the Insurance Commissioner policies can be cancelled if paid just one day late; state laws may vary. However, there are several precautions that can be taken to decrease the likelihood of making a late payment and lapses in policies. One of the most effective ways is to choose the option of paying premiums by electronic fund transfer. Numerous companies offer policyholders the ability to have the amount of a premium withdrawn from a designated bank account. This could not only avoid paying late, but many companies will waive or lower billing fees for customers that choose to pay for coverage in this manner.
There is also the old fashioned method of ensuring that the payment is mailed in advance so that it is received by the insurer before the due date. However, if a payment is going to be late, it may be better to call the carrier instead of mailing and see if it can be paid over the phone rather than experiencing a lapse, even if it is just for a day or two. Many insurers will offer policyholders the option to pay the bill over the phone to avoid any unfortunate repercussions. By making the effort to always pay one’s bills in a timely fashion, and by taking advantage of technological conveniences such as online bill pay or automatic bill pay systems, a policyholder could easily avoid many of the consequences that come with being late on payments.
Source: http://www.onlineautoinsurance.com/coverage/
