What Happens If You Stop Paying Car Insurance on time
not all cable car insurance companies give grace periods to their clients. A grace period is a span of time after the due date during which a policy stays active tied though the agio international relations and security network ’ metric ton paid so far. If your insurance provider grants you a seemliness period, it won ’ metric ton cancel your policy immediately because of a miss requital. even if you make a late requital for your car insurance—as long as it ’ sulfur within the grace period—your coverage won ’ metric ton end.
A few days after your ascribable date, your insurance company may send you a reminder via mail or SMS to pay your premium until a certain date without your coverage backsliding .
What Happens If You Don’t Pay Car Insurance
Paying recently is one matter ; stopping your car policy payments all in all is a different fib. If you calm don ’ t pay the premium after your grace period ends, it will lead to a domino effect—not just on your policy but besides on your overall finances. here are five things that can happen if you stop paying car insurance .
1. The Insurance Company Will Cancel Your Policy
For your car insurance policy to remain in effect, you have to pay the premium every calendar month, quarter, or year depending on the insurance company ’ second terms and conditions. once you stop making payments for your car policy premium, your policy will be canceled for non-payment. Under The Insurance Code ( Republic Act 10607 ) [ 1 ], indemnity companies in the Philippines have the legal right to cancel a policy ascribable to reasons such as non-payment of premiums. failure to pay the premium not entirely suspends but besides “ puts an end to an insurance narrow, ” wrote Insurance Commissioner Dennis Funa in his BusinessMirror column [ 2 ]. miss payments go against car policy policy terms and conditions, which merit a cancellation. In such a case, the police requires the insurance company to issue a notice of cancellation to the delinquent policyholder through chain mail or electronic mail. When you stop paying car policy ( beyond the seemliness period, if any ), you should be notified by the indemnity company before it cancels your policy. Read more: Switching Car policy Companies : bit-by-bit Guide
2. You’ll Lose Car Insurance Coverage
What happens if you stop paying car insurance ? Simple, you lose your car insurance coverage. You won ’ t get auspices against the fiscal impact of car damage or loss caused by an accident or any unfortunate incident. If your uninsured fomite causes a crash, you ’ ll have to pay for car repairs, checkup bills, and other expenses out of your pocket. This can cost a batch. unfortunately, you can ’ t make a claim with the policy company since your policy has already lapsed. You won ’ t be able to drive your car if the accident caused hard wrong to your car and you can ’ triiodothyronine afford the animate cost. The fiscal loss is bigger if you use your vehicle for business. Worse, you could be fined and jailed for heedless imprudence if you caused an accident that injured/killed person or damaged person ’ south property, and you don ’ t have enough money to pay for the damages .
3. Your Car Could be Repossessed
Did you finance your car through an car loanword ? You could lose your vehicle if you stop paying cable car policy. Throughout the loanword term, lenders require borrowers to have an active car policy policy. If you default on your bounty payments and your car no longer has coverage, your car lend provider can and will take back the vehicle. Read more: Got Into an Accident ? hera ’ s How to Get a Notarized Affidavit of Car Insurance Claim
4. Your Credit Score Could Drop
Another solution to the interview “ What happens if don ’ thyroxine pay car insurance ? ” is that your credit mark will take a hit. Your payment history—including your car insurance premiums—can increase or decrease your credit score. It ’ south because insurance companies submit their clients ’ payment transactions with them to the Credit Information Corporation. The data is then used to generate your credit report card, which credit agency use to compute your credit score. therefore any late or miss requital could negatively impact your credit grade. Why should you be concerned with your score ? A poor citation seduce can make it unmanageable for you to get a loanword, recognition card, home, or another vehicle in the future .
5. Your New Premium Could Increase
Some people who couldn ’ deoxythymidine monophosphate afford their premiums anymore try to save money by skipping payments—without realizing its costly consequences.
Stop paying car insurance now, and you might end up paying a higher agio on your next policy. If lenders find out you have a history of non-payment of your indemnity premiums, you ’ ll be considered a bad client. This means you can ’ t be trusted to make entire and seasonably car indemnity payments. As a result, car insurance providers are probable to charge you a higher car indemnity rate .
What to Do After Missing Your Car Insurance Payment
now that you know what happens if you stop paying car policy, what ’ mho adjacent ? You can ’ deoxythymidine monophosphate reverse your error, but you can at least minimize its negative impact. here ’ s what you can do .
Talk to Your Car Insurance Provider
deoxyadenosine monophosphate soon as you receive a cancellation detect, contact the car indemnity company to ask about what you need to do to resolve the return or prevent a sink in your coverage. You may try negotiating a reinstatement with the insurance company, specially if alone a few days have passed since your policy cancellation. The car insurance supplier might consider offering a requital option if you ’ re able to explain the circumstances that caused you to stop paying car insurance, like loss of income or death in the family. once you ’ ve settled your amateur premium, the insurance company could reinstate your policy. Although you might have to pay a tip for reinstatement, it ’ s a cheaper way to get your cable car insured again .
Find New Car Insurance Coverage
If reinstatement is not an option, or if you can ’ thymine afford your premium, it ’ sulfur better to get a fresh get down. Shop around immediately for a newly car insurance policy at a lower rate. You can well compare quotes from unlike providers and find the best deals through the Moneymax car policy comparison platform. You may even apply on-line for a car policy policy with an low-cost bounty and the coverage you need through Moneymax. Below is a list of top car insurance companies and their features .
Don’t Miss Your Payment Again
nowadays that your cable car policy policy is reinstated, make an feat to not miss any payments. If you tend to forget paying your bills, it ’ mho best to go for an car debit arrangement and have your premium automatically charged to your credit or debit poster. You can besides use on-line banking apps and mobile wallets to pay your premium on-line. just be certain to sufficiently fund your savings account or mobile wallet or better however, use a separate report just for cable car insurance and early monthly payments. Read more: 8 potential Reasons Your car insurance Claim Got Denied
One of the quickest ways to ruin your personal finances is to stop paying car policy. Better to prevent this from happening rather than stressing yourself out after getting your policy canceled. Do everything you can to avoid missing a requital. Understand your car indemnity calculation and terms and conditions in your policy and prioritize paying your premium. ( Photos from Freepik ) Sources:
Read more: Best car insurance companies for 2022
Venus is the Head of Editorial Content at Moneymax, with 15+ years of experience in digital market, corporate communications, PR, and journalism. She invests in stocks, reciprocal funds, VUL, and Pag-IBIG MP2. Outside of exploit, she ’ s crazy about cats and Korean drama. Follow Venus on LinkedIn .