If you fail to pay your auto insurance premium by its due date in San Francisco, you may still have time to keep the policy in force.
Most policies have a grace period that may give you extra time to make your payments, usually about 20 to 30 days. With that said, not all auto insurance companies provide grace periods to their clients.
If paying the premium before the end of the grace period will become a problem, you should contact your agent right away. Missing the deadline for a single auto insurance payment can lead to severe consequences.
If you manage to make a late payment for your car insurance, your coverage will not be canceled as long as it is done within the grace period.
Without insurance coverage in San Francisco, if you caused an accident, you are liable to cover the financial damage resulting from the incident. California requires drivers to carry a minimum amount of auto insurance coverage; otherwise, they will have to pay hefty fines.
This makes it extremely important to have a minimum amount of coverage for your specific risk profile.
The car insurance will not stay active if you don’t make your auto insurance premiums on time. However, once the due date passes and if you should fail to make any payments, your insurer may send you reminders and notifications via SMS, email and regular US mail to request payment of your premium until a specific date without losing your coverage.
In this article, we’ll dive deep into the basics of car insurance premiums and what happens when you cannot make payments for any reason.
Understanding Car Insurance Premiums in San Francisco
Your car insurance premium is the amount of money you need to keep your insurance policy active. Most people pay their premium every month, but some may choose to pay the annual cost in a lump sum amount.
The amount you’ll have to pay for your premiums is determined based on several factors such as:
- The area where you live
- Your driving history
- History of accidents
- The safety features of the car
- The car’s age, make, and model
It is worth noting that insurance providers aren’t always consistent with the premiums they charge to their clients. Therefore, it would be best if you considered shopping for the most affordable insurance premium that covers your basic needs.
Most insurance providers will give you multiple ways of paying your car insurance premium, including:
- Automated charges through your bank account or credit card
- Paying in person
- Sending a check through mail (not as reliable)
- Bank account withdrawals
In some cases, your insurance vendor may provide you with discounts if you pay the entire policy period in a lump sum payment instead of monthly payments or opting for paperless payment methods instead of mailing in a check.
What Happens If I Miss My Payments
If you don’t pay your car insurance premium, your insurer will cancel your auto policy. All states except for Virginia and New Hampshire require drivers to have a minimum amount of car insurance to drive legally. This means that you could be breaking the law by driving in California without car insurance.
If cops pulled you over for driving in San Francisco without an insurance policy, you might be charged hefty fines and have your license suspended, depending on where you live.
And here’s the real kicker: a lapse in car insurance coverage in San Francisco could make it more difficult (and expensive) to get covered in the future. This means the next time you apply for auto insurance; they will see the gaps in your coverage and use the lapses to justify higher premiums.
With that said, don’t start panicking if you missed a single payment. Most insurance providers are very accommodating to their clients and don’t want to lose their business. So it’s not difficult to get your policy reinstated.
How to Get Your Policy Reinstated After It Lapsed
If your policy gets canceled, you should call your agent to see if it can be reinstated. This means that once you clear your past balance, you’ll get your original policy back without a lapse. Unfortunately, you may have to pay a reinstatement fee to your insurance company for this service in some cases.
With that said, some insurance companies may decide not to reinstate your policy. As a result, it isn’t uncommon for them to increase your premiums to higher rates than before.
Usually, if you can make your payments before the grace period expires, your policy will get reinstated without any lapse in coverage. The reinstatement won’t appear on your insurance record, nor will there be a lapse in coverage. You’ll have the same policy with the same coverage limits and policy period.
To get the policy reinstated, you will have to contact your insurance provider over the phone or online.
You may be asked to fill out a form or sign a statement of no loss.
If your coverage has lapsed, it will be recorded on your insurance history. Unfortunately, this might mean having to pay higher insurance premiums in the future.
With that said, your insurance vendor may reinstate your policy after the grace period has expired. But this comes down to the vendor. If your insurance company agrees to reinstate your coverage, you will have to pay the premiums you owe, as well as a fine before they decide to reactivate your policy.
This means that you will have a lapse in coverage, so ensure you don’t drive on public roads in California until your policy has been reinstated.
In some cases, reinstatement isn’t always guaranteed. For example, your vendor may decide that you’re too much of a risk to insure. In this case, it’s probably a better idea to switch insurance companies that try to get your polity reinstated.
What If I’m Unable to Pay Auto Insurance
If you can’t afford your auto insurance, you may be paying too much to your current insurer. This is why we recommend shopping around and comparing quotes from other vendors to find out if you can get a better offer elsewhere.
There are other ways of lowering your car insurance premiums, including:
- Purchasing an auto insurance policy with home insurance.
- Asking your insurance company for discounts that you may qualify for. For example, many vendors offer discounts to drivers for taking safety precautions such as installing an anti-theft system, having a history of safe driving, and becoming a part of specific affiliations.
- Increasing your deductible to reduce your premiums. But this also means that you’ll have to pay a higher deductible following an accident, which isn’t always a good thing.
Never Drive Without a Car Insurance If You’re In California
Unless you live in Virginia and New Hampshire – states that do not require motorists to have car insurance – you should never drive uninsured. While lapses in coverage do happen, you should try to stay insured without any interruptions, if possible.
You can prevent any gaps in coverage by switching your policy. This way, your old policy will end just as soon as your new policy is activated. So you may be able to prevent any gap in your coverage.
Here are two things that can happen if you stop paying your car insurance, besides the obvious (such as losing your coverage).
i) Your Car May Get Repossessed
If you financed your car’s purchase, you might be at risk of losing your vehicle upon losing your auto insurance.
Most lenders require their borrowers to maintain an active auto insurance policy. So if you missed your premium payments, your loan provider might end up taking your car back.
ii) Your Premiums Could increase
Some people can’t afford their payments and deliberately miss their payments without fully understanding its repercussions.
If you stop paying your auto insurance, you could inadvertently drive up your premium rates – whether you decide to stay with the same vendor or switch to a new one.
Moreover, lenders will look at your history of nonpayment of insurance premiums and decide that you are a high-risk client. As a result, they probably won’t trust you to make full payments.
This is why care insurance providers are going to charge you a higher auto insurance premium.
Contact Your Insurer If Your Coverage Gets Canceled
Once you receive your cancellation notice, you should contact your insurance provider to see if there’s anything you can do to resolve the issue.
You may be able to negotiate a reinstatement with your insurance provider, especially if it’s only been a few days since your coverage got canceled. In addition, the car insurance provider may consider offering a payment option if you can explain the circumstances that prevented you from making payments, such as loss of a job or a death in the family.
If you cannot secure reinstatement, it’s time to shop around for a new auto insurance policy in San Francisco.
Don’t Miss Your Premiums Again
If you have your car insurance policy reinstated, try to make a maximum effort to make payments on time. In addition, consider opting for an auto-debit arrangement with your vendor to have your credit or debit card automatically charged (more on this below). This way, there will be zero risks of you forgetting to pay the bills.
Pay Your Insurance Costs Annually
Even though the lump sum payment seems overwhelming at first, it can save you hundreds of dollars on your premiums. More importantly, you won’t have to worry about the payment until next year. Once your annual payment is made, you’re covered for the whole year.
This is cheaper, and you won’t have to pay any interest on top of the annual cost, allowing you to pay your premiums with ease.
Once you’ve paid your annual insurance cost, it’s essential to start saving right away for next year. Divide the amount you just paid by 12 and save it every month. If you do this regularly, you should have the right amount by the next due date.
What Happens if You Owe an Insurance Company Money?
The most apparent consequence of owing another insurance company money is that it lowers your credit score. A poor credit score could increase your auto insurance rates by as much as 100% compared to a fair credit score that only increases the rates you’ll have to pay by about 30%.
So while it won’t prevent you from purchasing a policy from a different company, it will affect your premises.
How to Avoid Further Lapses in Converge
To prevent further lapses in insurance coverage, you’ll have to plan. This means being more responsible for your bills and adopting modern solutions to make bill payment easier and faster.
Here are two things you can do to make timely payments to your insurance vendor:
i) Use Credit Cards if Bank Funds Are Not Available
People often miss payments because their checks bounced or they had insufficient bank funds. If you fear that your funds won’t be able to cover your bills, consider setting up automated payments through your credit card. This will let you stay on top of your bills, and you’ll be more consistent with your payments.
ii) Lower Your Premiums
The lower the amount you have to pay, the easier it is to stay consistent with your payments. You may even qualify for a few discounts for making timely payments. Ensuring that your premiums are as low as possible makes it possible to continue paying on time and without interruptions. Just make sure to pay your credit card bill to ensure it can provide regular payments to your insurer!
Another piece of advice is to eliminate any option that requires mailing a check. These paper-driven processes are prone to human error and logistical delays. In addition, it isn’t uncommon for checks to get lost in the mail. Although most insurance vendors provide their clients with the option of mailing a check, this form of payment isn’t reliable.
Even if you’re not directly responsible for the day, such as weather problems and negligence by the shipping provider, you will be on the hook for late payments. Moreover, if the check is lost, you will have to issue a stop payment order for security reasons, which takes up even more of your time.
It’s better to automate everything, so you have one less hassle to deal with.
So there you have it – the full story on what happens when your insurance coverage gets canceled. Of course, if you’ve been in a car accident, you’ll want your insurance company to handle the bills. Our expert personal injury lawyers at Phoong Law in San Francisco, California, can help you get compensated if you’ve been injured in a vehicle accident. Get in touch with us today for a free consultation.