We’ve all had moments when we kick ourselves for forgetting something. You get home from the market and realize you’ve forgotten one ingredient for dinner. You’ve forgotten your sister’s birthday or the annual company picnic. Normally, you can recover from these momentary memory lapses, but no matter what, don’t forget to pay your insurance premium on time! That’s one lapse that could cost you.
Most home, auto, and PC policies contain no grace period. Even if you’re a single day late, the insurance company could choose not to accept your payment and cancel your insurance policy. In most states, it’s illegal to be uninsured. In addition to possible legal fees, there are other repercussions.
The Risks of a Lapsed Policy
Whether a lapse is intentional or not, it’s not worth the risk. Any lapse in an insurance policy can place you in a much higher risk bracket, especially if it’s been 30 days or longer. Once you reapply for insurance, your rates could be raised drastically for the same amount of coverage. And you have to consider Murphy’s Law: only once you’re uninsured will you get into an accident.
You’re still personally liable for the damages if you caused the crash and your out-of-pocket costs can be devastating.
If necessary, consider an automatic draft from your bank account. Just be diligent in notifying the insurance company if there’s any change with your card. Losing your policy because your card was lost is no excuse.
Preventing Insurance Lapses
There may be multiple reasons to avoid paying your insurance bill, but none is worth the long-term consequences. Stick to a budget that allows for your insurance payments and set up email reminders for bill payments. Paying your insurance bill is essential to maintaining coverage and affordable rates, and if you have to tie a string around your finger to remind yourself to check your insurance bill is paid each month, do it, because the alternative is not one you want.