Did you know… Paying your insurance premiums late can cost you money?

I see it time and time again, clients paying their premiums after the due date, but before the cancellation date. It’s a bad habit and a good one to break. Technically, your payment reaches the company “in time”, but did you know the insurance company frowns on this practice?

So how does this play out? Two ways. First, you miss the Cancellation for Non-Payment Notice and the policy actually cancels. The company advises this insured has X# of Cancellation for Non-Payment Notices so no, they will not reinstate. Second, you have some claims and your company decides to drop you. The company will not reconsider because the insured has X# of Cancellation for Non-Payment Notices. In both instances, you could then be faced with a non-preferred insurance company and higher rates.

Also, if you have a lapse of insurance, you could face Motor Vehicle fines ($8.00 a day times the # of days without insurance) plus many insurance companies require you to have current in-force insurance (for 6 12 months) in order to get their best rates.

So, if you are one of these folks, you may want to pay your insurance premiums when you receive the bill and not wait until you receive the Cancellation for Non-Payment Notice. A good way to do this is to sign up for Electronic Fund Transfer (EFT) where the insurance company automatically transfers funds from your checking account or bills your credit card. Did you know if you bill your premiums to your credit card you may also earn rewards points on your credit card?