Missing your auto insurance payment can be stressful. There are many reasons someone may miss a payment. Life gets busy and budgets get tight. Job loss, unexpected bills, or simply forgetting to pay can happen to anyone.

However, missing a payment can lead to a policy cancellation and other consequences down the road. Let's take a closer look at policy cancellations due to nonpayment, coverage lapses, and what you can do to make sure you stay protected.

Auto insurance policy cancellations

State laws prevents immediate cancellations if you miss your premium due date; however, each state has different laws and there may be circumstances where the company can immediately cancel your policy for nonpayment.

In most cases, the insurance company will provide a written notice about your cancellation. Depending on the state and company, you may receive an email or letter to your mailing address on file.

Even if you don't receive the written notice, as long as the insurance company can prove they sent it, then the stated cancellation date is effective, unless you paid your overdue premium and any other fees required.

Reinstating a lapsed auto insurance policy

If you don't pay your premium, your insurance policy will be cancelled effective the date on the written notice. However, you may be able to reinstate your coverage. Most companies have a reinstatement process they follow.

Generally, you will want to contact your insurance company or agent as soon as possible. The longer you wait, the harder it may be to reinstate the policy. You will likely be asked to pay the outstanding balance. This may include the overdue premiums, a late fee, and possibly upfront payment for the new policy term.

Every company handles reinstatements differently. If your policy has been inactive for a while, you may need to provide updated information. You may also want to ask about any gaps in coverage and how that may affect your new policy.

Keep in mind, reinstatement is never a guarantee. If your lapse is too long or you have frequent lapses, the insurance company may deny your request to reinstate. If that's so, you may need to shop around for new coverage.

At InsureOnline.com, we specialize in helping all types of drivers find insurance coverage. Give us a call at (844) 358-5605 or start your auto quote today.

Consequences of a lapse in coverage

Letting your auto insurance lapse comes with many risks.

• Driving without insurance is illegal in most states. Almost all states require drivers to carry auto insurance. If you're caught driving uninsured or underinsured, you could face fines, have your license suspended, or even have your car impounded, depending on your state's laws. You may even be required to submit an SR-22 in the future.
• It puts you at financial risk. Without insurance, you'll be responsible for paying out of pocket for any damages or medical bills, if you're in an accident. You won't have any of the financial protection that an auto insurance policy provides. Remember, accidents can become expensive quickly.
• You may face higher future premiums. A lapse in coverage is viewed as risky behavior by insurance companies. If your policy lapses, your next premium could be higher, even if you're switching to a new company and even if it only lapsed for one day.
• Vehicle repossession. Many lenders and car leasing companies require insurance as part of their terms of the loan or lease agreement. Your vehicle could be repossessed for not carrying the required auto insurance.
• Credit scores may be impacted. Some insurance companies may report late payments or lapses in coverage to credit bureaus. This could hurt your credit score, making it more challenging to get loans or credit cards in the future.

Avoid lapses and missed payments in the future

Missing a payment and the potential consequences is stressful. There are some things you can do to help you get organized and simplify your life to help you make your payments on time.

• Set up auto-pay: Automatic payments help ensure you never miss a due date.
• Use calendar reminders: Set a calendar reminder so you remember to pay your premium before or on the due date.
• Talk to your insurance company: If you're struggling with payments, call your insurance company. Some may offer payment extensions or flexible plans. This is not a guarantee, but it's still good to ask.
• Budget for insurance: Your insurance premium should be in your budget just like rent and utilities. Set aside money each month to make the payment.

Shopping for insurance after a lapse

If your policy cannot be reinstated or you're looking for a new company, we can help you shop for a new policy. We compare quotes from our trusted partners to help you find a policy that fits your needs and budget.

We specialize in helping all drivers find coverage. Even if you have a lapse in coverage, a poor driving record, or another unique situation, we can help. Give us a call at (844) 358-5605 or complete our simple form to get started.

About InsureOnline.com

InsureOnline.com is a digital insurance agency that provides affordable insurance to consumers who want to shop and purchase insurance online while still having the option to work with an agent if they wish. The agency offers auto, home, life, health, and commercial as well as other specialty lines of insurance. Our goal is to provide an easy, fast, convenient, and safe online shopping experience for consumers looking for the best price by utilizing all the latest and greatest technology. Based in Bedford Park, Illinois, we are licensed to write business in many states and have a multilingual staff licensed and certified in a variety of insurance lines. We partner with many highly rated insurance companies to provide the best insurance solutions to meet your individual needs and your budget. Buy insurance online or talk to a licensed insurance agent! It's your choice.

For information and quotes on insurance coverage, please visit InsureOnline.com or call (844) 358-5605.

The general and educational information here supports the sales, marketing, or service of insurance policies. Individuals should seek advice from their own qualified and duly licensed independent tax or legal advisors based upon their own particular circumstances.