When insurance is obtained, you are expected to pay your premium every month before the due date. If for some reason you cannot make a payment by the deadline, you might be given extra time to issue the outstanding payment before the policy is cancelled. This is called the “grace period”. During this period, your insurance will still be active, but your account will be in arrears. If you cannot issue payment by the end of the grace period, your insurance provider has the right to completely cancel your coverage. Learn more about the insurance grace period here and what you can do if you’re falling behind on your payments.
Is the grace period the same for each lender?
There is no industry standard. The grace period can vary between lenders and some lenders do not even offer grace periods for certain policies. If there is no grace period, the insurance provider could cancel your policy as soon as the payment is late. So it’s important to read the fine print in your contract to understand just how much time you are given to pay your arrears before your policy is cancelled.
Will there be penalties if I miss my due date?
Your policy will also include information about the penalties and when they will be charged. Generally, most lenders charge a late fee as soon as the due date is surpassed. However, some will offer an initial grace period with no penalty and then an extended period with a late fee.
Can I still make claims during this time?
Yes, you can still make a claim during the grace period and the insurance provider will be required to honour it.
Can my insurance be reinstated?
Not all insurance providers will cancel your policy once the grace period has been breached. If you can remedy the situation the provider may decide to reinstate your policy, but not all insurers will do so.
What should I do If I missed my payment?
If you have accidentally missed a payment, settle your account immediately and contact your insurance representative to explain why you were in arrears. Depending on the circumstances, they may let this one occurrence slide. You should also call the insurance company if you are struggling financially and are unable to make any of the future payments. Some insurers will work with clients by setting up a payment plan that will help until they can get their finances back on track.
Can I get insurance from another lender if my policy was cancelled?
Having your policy cancelled is never a situation you want to be in. Other insurance lenders could consider you a risk and in return charge you far higher premiums than you were paying before.
If you find yourself in this situation, contact us at Rowat Insurance Insurance. Our team of expert insurance brokers will help you work through it and find you a new policy that you can manage.