What Happens If I Miss A Car Insurance Payment?

When budgeting for a car insurance policy, it is imperative to remember your premium payment installments. However, what happens when you miss out on your car insurance payment?

You might miss out on paying your auto insurer due to the Covid-19 economic backlash or because you simply forgot the date. For both cases, it is best to evaluate the conditions that can occur from this budgetary mishap.

Meanwhile, click here to learn more about automotive insurance rates in Edmonton.

Things to Do If You Know You Will Miss a Payment

If you are currently facing a financial emergency, with the premium payment date around the corner, the following tips can be helpful. You might realize beforehand that you will be unable to pay the auto policy premium on time.

First, make sure to contact your insurer beforehand. Many well-known insurance companies prioritize their customer’s payment issues. Therefore, informing your insurer BEFORE missing the payment can be super helpful. If you convey your current financial constraints, the insurer might provide a few valuable solutions, such as:

  1. A one-time exception of changing the payment date to fit your financial schedule
  2. The permission to make a credit card payment in advance to avoid non-sufficient fund (NSF) charges
  3. The benefit of receiving fresh payment dates for all future premium schedules, to help you pay on time
  4. Allowance of missing one payment date due to severe issues such as COVID-19 unemployment

You can also update your bank about your current financial status. Informing your bank beforehand can secure you from incurring late-payment fines and possible future higher-premium rates. Your bank can then provide you with overdraft protection on the account. If your income is delayed, this one step can help you with some extra time to pay off the car insurance premium.

You can also set some money aside every month. It can come in handy if your account is low on balance to pay off your auto insurance premium.

If You Miss Your Payment for the First Time

If it is your first time missing out on your car’s policy payment, the levels of risk are less. Your insurance company will notify you of the non-payment via mail or a letter. Since it is your first time, various well-known insurers can help you negate any late fees. Having a prompt payment history can help you avail of special arrangements with your insurance company.

For example, many insurance companies set up repayment options so you can attempt to pay on the scheduled date. If you have a credit card and notify the insurer of the same, they might even allow you to make the payment through it.

Some insurance companies also provide options to shift it towards your next due premium payment. They will postpone your current pay towards the next payment date to help you avoid NSF fees. You can also avail the benefit of paying the missed amount in small portions. Some insurers divide the due amount into small bits and add them to future payments.

Every insurance company has its unique terms and conditions for missed payments. So make sure to speak to your insurance agent about their steps to handling this issue. Due to the Covid-19 pandemic’s hit on the overall financial sector, insurers are now taking proactive steps to help their clients facing monetary backlashes.

Things to Do After Missing Multiple Insurance Premium Payments

Missing multiple premium payments on your car insurance can prove to be risky for your car’s overall safety. Some insurers have the right to cancel your insurance due to frequent non-payment of its premium.

According to the Financial Services Regulatory Authority’s (FSRA) Auto Insurance Consumers’ Bill of Rights in Ontario, if you pay your premium within 30 days after one or two non-sufficient funds (NSF) issues, you can keep your policy in place. This is applicable for missing 1-2 payment dates due to monetary problems. Keep in mind that you must still make the payment on time. Paying on time can help you maintain a financial umbrella over your vehicle.

Not doing so can result in you paying NSF fees in addition to your late payment. If you fail to update your insurer on your reason to delay the premium payment, your insurer has the right to cancel your policy.

How Does Non-Payment Affect My Records?

Your insurance record will show this default in payment. Not to forget, the non-payment status stays on your record for up to 3 years, making it a challenge to avail of further affordable premiums. If you fail to make the payments within their specific dates, insurers can send the amount to collection agencies, which might put a dent in your credit score.

Holding a history of non-payments makes you a high-risk driver in the eyes of insurance companies. Moreover, a low credit score can also affect your reputation as a customer. Many might reject your application, while some might raise your auto insurance premium rates.

Is Cancelling The Policy An Alternative?

Many people in this situation opt to cancel their car insurance. In reality, it is a careless decision as some insurers might charge you a penalty for premature cancellation. Additionally, the gap between your old and new coverage can raise the premium rate with your new insurer. Finding affordable insurances can be a hassle if you cancel your current policy due to non-payment status.


If you miss out on paying your auto insurance premium, ask your insurer about suspending the policy until you can financially maintain its benefits for your car. Before buying a policy, read through its terms and conditions to prepare yourself lest you miss any car insurance payments in the future. Car insurance providers like youi usually discuss these with you while educating you on your options. Being proactive in this case can save you from a lot of financial concerns in the future.

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