What Happens When You Make A Late Car Insurance Payment
When it comes down to making car insurance payments, like any sort of payment, it's best not to be late. If you are, many times there are consequences that will be applied. These consequences are going to vary depending on what car insurance company you have. How your late payment is handled may depend on the amount of time you have held a car insurance policy with the agency and the number of late payments you have had. If you have never been late with a payment before, the company may forgive it once, but you shouldn't expect that to happen often.
After one or more late payments, a company may adjust your car insurance rate. When attempting to apply for insurance from other companies, the customer may find that he or she is offered a higher car insurance premium due to reported past late payments (which also have the potential to damage a credit score). Rules vary by state, but it is legal in some places for insurance companies to completely cancel a car insurance policy (or raise the rate) due to one late payment. If the customer continues to be late with monthly premium payments, the insurance company may also adjust the policy, requiring a semi-annual or annual payment for continuation of coverage. This means that the customer must pay more money up front for the coverage. Essentially, the more the insured is late on payments, the greater the chance of the insurance company viewing them as a risk. If the customer is labeled as a high risk, he or she can expect insurance rates to increase, and their policy may be dropped altogether.
As with any late payment, it is always a good idea to maintain communication with the creditor. If a customer knows that he or she will be late on an insurance premium payment, they should contact the insurance company directly to work something out and to schedule a solid late payment date. It may be beneficial for the customer to work directly with his or her agent, face-to-face. If making the premium is an issue, the insurance agent may be able to adjust coverage to lower the payment or schedule the payment date to a more feasible date during the month.
There are methods of preventing late payments if this is a concern for the policyholder. For example, most insurance companies now accept online payments, offering you the opportunity to schedule automatic payments or e-mail reminders about your payment due date. You can avoid the consequences of late car insurance payments by making use of these tools and keeping yourself on the ball.