Ask the Car Insurance Expert
What's the grace period for car insurance?
That depends on the insurance company and the regulations in the state where you live, but generally the grace period for car insurance policies is short. Usually, the insurer sends you a 10-day notice of cancellation a few days after your premium due date, although some states require more advance notice.
Check with your car insurance company to find out, but, better yet, do whatever you can to pay on time to avoid losing coverage. If you don't pay within the grace period, the car insurance company can cancel your policy. Then you'd be without the safety net of insurance coverage every time you got behind the wheel, which could have dire financial consequences if you caused a bad accident.
Consequences of car insurance lapses
You'll need to reapply for insurance if you let your policy lapse, and chances are you'll face higher premiums. The insurer may want to inspect the car to make sure there were no losses in the intervening period. Typically, car insurance companies will take you back after a policy lapse, although you could run into trouble if you've been chronically late in paying your bill.
A history of paying your bill late can also make it harder to find affordable coverage with another company. Insurance applications ask if your insurance has ever been cancelled. If the answer is yes, then insurers consider you high risk and will charge higher premiums.
Take steps to pay your car insurance premium on time
If making a large payment every six months is difficult, arrange to pay in smaller monthly payments. Can't make it to the post office on time? Then arrange an automatic transfer of funds from your checking account to the insurer, or pay by credit card over the phone.
Seek help from a reputable nonprofit credit counseling service if financial problems are making it difficult to pay for insurance and other basics. Look for a service that offers free education and help with budgeting. Finally, if the premiums are busting your budget, look for ways to cut your car insurance rates, such as raising the deductible and making sure you get the discounts you deserve.