Every automobile owner is required to get at least the minimum auto insurance coverage by their state law. Some car dealerships won't even let you pull off the lot without having at least a limited liability insurance policy activated for the new purchase. The key to never have to worry about being covered in the event of an accident is by keep up with timely payments and not having multiple traffic violations. However, if you fail to comply with either of these requirements, your Michigan Auto insurance policy may be at risk.
What happens when your insurance payment is late?
Even if your insurance payment is late by one or two days, this may be enough for an insurance company to temporarily suspend your insurance. In auto insurance terminology this is called a lapse in your policy. A lapsed car insurance means that you are no longer covered and are considered an illegal driver.
Before an insurance company penalizes you with a lapse in insurance coverage, they will usually send you a letter stating that they intend to stop your insurance cover if they don't receive a payment in so many hours or so many days. They might even give you a call. However, if they don't hear back from you within the time they stated, consider yourself driving without coverage. Your insurance company will also charge you a late fee of between $8 and $12 per day until you pay.
Once an insurance company decides to lapse your policy, and you were caught driving and pulled over or you end up in an accident, you run the risk of your license and registration being suspended. If you lose your license, you'll have to pay a fee to have it reinstated. You can even face jail time if your found guilty in a car accident case. Statistics show that a high number of accidents involve uninsured drivers.
What to do if you know you'll be late paying your insurance?
Insurance companies do understand when eventualities arise such as hiccups in direct debit, technical issues with your payment card or even if you are in the middle of working and are unable to give a payment at that moment. In most cases, insurance companies will work with you to create a payment plan or to submit an alternative date for payment. If you call your insurance company and explain to them why you're going to be late paying your insurance premium, they may be a bit more understanding and willing to work with you.
If you wait until your insurance policy lapses, you'll be in for a world of problems. Not only will you incur penalties from the DMV, but the insurance company may list you as a high risk driver and increase your premiums. Should your insurance company choose not to cover you again, you'll have to go with another insurance provider which may leave a mark on your record that could cause long-term damage and result in your premium to be higher.
With late payments, it's better to be safe than sorry. Contact your Insurance Planning Service agent today and explain to them your situation and see if they're willing to work with you. For more information about auto insurance or if you have any questions about a lapse in cover, contact us at 800-220-5582.