What Happens if I Pay My Car Insurance After the Due Date?

A late auto insurance payment could mean a cancelled policy.

A late auto insurance payment could mean a cancelled policy.

If you're not on top of your bills, you might end up submitting your car insurance payment after the due date. If you're only a few days late, the worst consequence from late payment is typically a late charge. However, if you exceed your insurance company's grace period for late payments, the insurer might cancel your policy.

Late Fees

Even if you're only one or two days late on your car insurance payment, you'll probably see a late fee attached to the current invoice or next month's invoice. Late fees vary depending on your auto insurance carrier, but they usually cap out around $50 per incident. If you do see a late charge on your account, talk to a representative at your car insurance company. If you're a longstanding customer with a solid payment history, the company may be willing to waive the charge.

Coverage Cancellation

When you make a car insurance payment, you're paying for coverage for an upcoming time period. The good news is, this means you don't have to worry about an auto insurance company sending your account to collections if you are delinquent on your payments. The bad news is, if you wait too long to make the payment, the company may cancel your auto insurance for the upcoming period. You can face major penalties if you get caught driving without adequate insurance coverage, so be sure to ask your insurance company what its grace period is for late payments.

Increased Premiums

Even if you don't get caught driving without sufficient insurance, a lapse in coverage from a late payment can still hurt you. When you reinstate your policy or re-apply for auto insurance, the auto insurance company may consider your gap in coverage when it determines your premiums. If your insurance has expired from nonpayment, expect to pay higher insurance premiums for at least six months.

Steps to Take

There are steps you can take to avoid the consequences of late payments. If it's financially feasible, consider paying for your insurance coverage policy in full every six months. You'll usually get a discount for paying all at once, and you'll have less chance to miss a payment. If you are paying for insurance a month at a time, set up an automatic payment through the insurer or your bank website to avoid late payments.


About the Author

Based in San Diego, Calif., Madison Garcia is a writer specializing in business topics. Garcia received her Master of Science in accountancy from San Diego State University.

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