Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Written by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 29, 2022

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In a nutshell...

  • In the insuring agreement, paying your insurance is your primary duty as the named insured
  • If you don’t pay your auto insurance premiums by the due date, the insurer has the right to cancel your coverage
  • It’s common for larger insurers and insurers who sell products to standard and preferred risks to offer their clients grace periods
  • If the insurer gives you the extra time to make your payment, you can submit your payment late without having to worry about any lapses in coverage
  • If you have even a small lapse in coverage, the state can penalize you for not maintaining mandatory coverage

No one ever wants to be in a financial situation where they have to pay their bills late. While making a late payment isn’t ideal, there may come a time where you’ll have to decide between paying your car note on time or paying your utility bill online.

Many of your service providers will give you extra time to catch up on your balance, but that doesn’t mean that you can pay just any bill late.

When you own a car, carrying insurance is the law. If you don’t pay your insurance, the insurer will cancel your coverage and it won’t be valid. Sometimes, policies will cancel as soon as the due date passes. Other times, the insurer will give policyholders some extra time.

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If you’re planning on paying a payment late, here’s what you should know:

Non-Payment Cancellation


Insurance companies must follow the rules when they sell personal car insurance to the public.

In every state, there’s a rulebook that details what the consumer’s rights are and when the insurer can initiate a policy cancellation. After a policy is underwritten and issued, the company is limited in the reasons that a policy can be canceled.

While companies can cancel a policy when the policyholder commits fraud or loses their license, the most common reason that an insurer will cancel a policy mid-term is because of payment issues.

If you don’t submit a payment in advance for your coverage, the insurer will terminate your coverage for non-payment.

Going without insurance can be dangerous. While it’s not really a good excuse, some people simply overlook their due date and fail to make their premium payments by the due date on the billing statement.

To protect the vehicle owner from having a lapse because of a random lapse in their memory, some states require providers to notify insureds of an impending cancellation.

If state law says that providers must send their clients advance notice before canceling a policy for non-payment, it will give you a few extra days to submit your payment before you’re without insurance.

Since the written notice must be sent 10 to 30 days before the cancellation date, you will be allowed to pay your premiums late but may be assessed a late fee.

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Do all companies offer their customers a grace period?

A grace period is the period of time that you have to submit a payment after the payment due date and before the coverage lapses. When states make notice mandatory, it basically makes giving a grace period mandatory, but not all states require advance notice.

If you live in an area where the provider can process the cancellation at 12:01 am the day after the payment was due, you should check to see which insurers offer grace periods.

Not all companies are obligated to give their clients the extra time that they need.

If you’re late paying your bill and a grace period is offered, you will have between one and 30 days to pay without any lapse.

It’s up to you to contact the insurer and ask when the policy will terminate if you’re unable to pay so that you can try to make arrangements to cover the expense before the coverage ends.

Do you have to pay a late payment fee?


If the company has to mail you a notice, you may have to pay a late payment fee. Many times, the fee is added to your balance so it is broken up into several payments.

Sometimes, you have to pay the late fee and the balance due to avoid cancellation.

If your automatic payments don’t go through, you’ll pay a Non-Sufficient Funds fee as well.

You should avoid paying your premiums late at all costs. If your coverage is terminated, see if you can reinstate it with a payment. When reinstatement isn’t an option, you should buy coverage elsewhere.

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