Life goes by fast. Sometimes it feels like there are too many things to do and very little time to do them. It can make it easy to forget about certain things—like paying your car insurance premium. Slip ups like that can seem innocent enough at first, but they can cause severe consequences (like a lapse in coverage) if you let them slide for too long. That’s why insurance companies offer something called a grace period, which might save you from being uninsured at the worst possible time.
What Is a Car Insurance Grace Period?
A car insurance grace period is the amount of time your insurance company gives you to turn in a late payment before they cancel your policy. The exact amount of days you will have will vary depending on the insurance company you’re working with and the state in which you reside.
The average amount of time that insurance companies offer as a grace period is 10 days, but you might also see insurance companies offering anything between 24 hours and 30 days. Some states don’t require insurance companies to offer any grace period at all, though, allowing the companies to cancel your policy as soon as your payment is late.
Since there are so many things that can influence a grace period, the best thing you can do if you believe you might be late for your premium payment is to get in touch with your insurance company and ask about the grace period they offer, if any.
How Does a Grace Period Work?
Let’s say your insurance company offers a 10 day grace period for late payments. You have until the tenth day for them to receive your payment and keep your policy active. Within these 10 days, you are still insured and can still file a claim—it does not count as a lapse in coverage.
Are There Any Late Fees Involved?
Most likely, yes. Many insurers charge late fees for missing the original payment due date. On top of that, they might also raise your premiums when it’s time to renew your policy; this might be especially true if you end up repeatedly taking advantage of their grace period.
However, while you might see these fees as anything but ideal, they are still favorable to a lapse in coverage. Not only is driving around without insurance illegal, but it might bring about some severe consequences. You would not only be personally responsible for every single cost associated with an accident, but you could also get your license revoked. Not to mention that a lapse in coverage will both make it harder for you to renew your policy and also guarantee you some significantly higher premiums.
Therefore, even if your insurance company enforces late fees for the use of a grace period, it is still better than them not being flexible at all.