Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Keeping copies of documents in a safe place allows for reviewing billing due dates
  • Set up an online account to check up on due dates more easily
  • Be sure the payment method you choose allows the funds to be processed quickly

Car insurance is a contractual obligation between the buyer and the seller. The seller, the insurance company, is required in good faith to pay out on valid claims. The buyer, the insured, is supposed pay for the premiums associated with the policy.

Failure to pay premiums is the most common reason why insurance policies are canceled. Failure to pay is a breach of contract.

No excuse is going to be accepted when nonpayment occurs. Simply forgetting about when the payment is due is not a valid excuse. Not knowing what the terms associated with a policy is not an excuse either.

Anyone who takes out an auto insurance policy really does need to be diligent about paying on time. Paying on time is only possible through knowing when a payment is due and how much is due.

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Checking on the Due Dates

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Here are some tips for finding due dates:

  • Policy – The due dates on the insurance policy are sure to be listed on the policy documents. Put the documents in a safe place in order to review them. Checking on the due date and writing the due date down on a calendar would be advisable. Log the date and the amount due on the date.
  • Bills – Keep copies of bills and put them in a drawer as well. All these steps make it easier to figure out when the payments are due.
  • Online account – Creating an online account is advisable to open since logging into the account will reveal all. The payment and billing information are both going to be very clearly on display in the account.
  • Phone – Of course, placing a simple phone call to an insurance agency’s customer service representative should add further confirmation in regards to when the payment is due.

One thing does need to be noted here. Knowing the due date is not enough. Making proper payments is critical or else the policy could end up voided.

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Setting Up Automatic Payments

The best way to avoid missing a payment would be to authorize automatic payments. If a payment is due on the third of every month, then the insurance company’s billing system will withdraw the funds.

Setting up the system to take money from a checking account with a line of credit/overdraft protection feature might be the best option. A credit card would be good as well, but there is always a chance a card might expire.

If the system allows for a backup payment, this option might be a good thing to take advantage of.

Do not automatically assume automatic payments are going to go through. Accidents happen and problems arise.

Always double-check on the account in which the money is to be withdrawn from or charged. Make sure activity has taken place on the auto insurance policy.

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Avoid Mailing in a Check

Checks do get lost in the mail. They also take a bit of time to process. If a payment is due on the first of the month, mailing the check out on the 28th of the previous month might not leave enough time for mailing, receipt, and processing.

Paying via a credit card or through a bank draft might be a better idea. Making payments over the phone is fairly easy. Do so with at least 48 hours left to the due date.

Credit card payments can be done online, which is a good thing to be sure. Virtually all insurance companies allow customers to review and pay bills via an online account. Online payments come with a confirmation number that details the payment was processed.

Paying in Full

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Probably the easiest way to make sure that no payment ends up being late during the year would be to pay the full amount of the premium as soon as the new term starts. Obviously, this payment would need to be made on time as well.

Paying an entire auto insurance premium is not easy since some of the premiums may end up being costly ones. Take this potential cost as a major reason why it is a good idea to perform extensive comparison shopping.

Anyone unable to pay off an insurance policy in full should break the payments up into the smallest number of payments possible. Paying twice or three times per year means fewer chances to miss a payment than would be the case when the number of payments is 12 per year.

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The Grace Period

Depending on the provider, an auto insurance policy may come with a grace period. This means there will be a window of opportunity in which a late payment may be processed without penalty.

The window could be 10 days or it could be 30 or there may not even be a grace period. Always check with the insurance provider to learn what the grace period’s duration is if there is any.

Do not rely on the grace period, though. Abusing the grace period is a good way to increase the chances a policy ends up canceled. A canceled policy means all the protections of the insurance are gone.

Pay the debt on time at the official due date to avoid any disastrous problems.

Reinstatement

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A person whose insurance policy is canceled due to nonpayment could always ask to be reinstated. The insurance may require the past due amount and an additional payment in advance in order to reinstate the policy.

Even with reinstatement as a possible option, the vehicle would in uninsured during the gap in insurance creating a major risk.

And there is no guarantee the insurance company will choose to reinstate. The insurance company might have issues with the particular client and this would be as good a time as any to curtail all associations.

As a result, the driver would need to seek out a new policy with a new company.

The best policy is not just an affordable one with great coverage A solid policy also comes with solid terms. Good terms also include flexibility with payments and fair treatment to those who miss a payment.

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