Auto insurance policies being cancelled is not uncommon. Oftentimes, people forget to pay their premiums or have other life events that make it difficult to keep up with payments. Insurance companies understand this and are usually willing to work with customers to reinstate their coverage.
Reinstatement is basically a process of restoring coverage and reinstating the auto insurance policy to its original condition before it had been cancelled. However, the requirements may vary depending on your history of past cancellations and underwriting guidelines of your insurance carrier.
What are the ways to reinstate an auto insurance policy?
Reinstating without lapse: This reinstatement option involves you signing a so called 'Statement of No Loss' confirming that no losses have occurred during the time your policy was cancelled and you make the past due payment. Your policy will be reinstated as if there was no lapse. However, if an loss did occur during the cancel period, your insurance company will NOT reinstate your coverage.
Reinstating with lapse: If you choose this option, your policy will be reinstated with coverage after payment is received. However, any losses that took place during the cancellation period will not be covered. If you have numerous cancellations and reinstatements over the term of your policy, your insurance company may refuse to renew or reinstate it.
While some insurance companies may offer different dollar amounts to reinstate your policy, in most cases there is only one reinstatement option. Your insurance agent or company can help you understand the process for your specific carrier.
When does my auto insurance cancel?
Your insurance company will give you a grace period to pay your auto insurance bill, which is typically 10 days after your due date, however, if you miss this payment window then your auto insurance coverage will be cancelled. Your insurance company is required to notify you before cancelling your auto insurance policy and the notice must include a statement that the policy may be reinstated for up to 30 days after cancellation. Reinstatement periods vary between companies.
What happens when my auto insurance is cancelled?
If you failed to meet the due date and its grace period, your policy will be terminated for not paying premiums. Your cancel notice from the insurance provider specifies exactly when it takes effect with a precise timestamp - usually 12:01am on that day. Even if you are intending to pay on this very same cancellation date, keep in mind that your plan has already cancelled at one minute past midnight; as such, the reinstatement process needs to take place afterwards.
Any losses that occurred past 12:01am on the cancel date will not be covered, even if you reinstate the policy by making a payment.
How much time do I have to reinstate the policy?
Depending on the company, the reinstatement period can last anywhere from 7 to 30 days. The closer you come to that next month's due date, though, the more likely you are going to have pay for both that previous month and the upcoming one at once.
What if my cancelled policy has an SR22 filing?
If your SR22 insurance policy is cancelled, your insurer must notify the state's license bureau. If this happens, your license may be suspended again. In some cases, the state will make you restart your SR22 period, which means you'll have to maintain an SR22 for a longer period of time.
What if I get pulled over after my policy has cancelled?
In the event that you are stopped by law enforcement for a traffic violation and your auto insurance has lapsed or been cancelled, you may receive a citation for driving without insurance. In some cases, officers will contact your insurer to validate your policy details and expiration date; in other instances, court clerks might also perform these checks. It's critical to bear in mind that an up-to-date insurance card is only valid when all premium payments have been made. Receiving tickets due to lack of coverage could even culminate with an SR22 requirement imposed upon you.
Will my lienholder receive notification of the auto insurance cancellation?
Your insurance company will notify your lienholder if your auto insurance coverage is cancelled. Your lienholder may also be able to find out about the cancellation through other sources, such as a public records search or by checking with you directly.
By failing to obtain auto insurance, your lienholder could add expensive loan protection to your monthly payment or even begin the repossession process due to a lack of coverage on the vehicle.
What happens if I miss my reinstatement period?
If your auto insurance has been cancelled and you neglected to take action within the reinstatement period, chances are that you will need to acquire a new policy. Unfortunately, this also means that you won't qualify for any previous discounts on the coverage.
Don't panic if your auto insurance is cancelled--just make sure you restore it promptly. To learn more about how to get reinstated, call us at 816.453.7722 for details!
Best ways to avoid cancellations of your auto insurance
There are few ways to avoid auto insurance cancellations, of course is to pay on time. Sometimes easier said than done.
- Set you auto insurance on automatic payments, so it will automatically come out of your debit card or checking account.
- Setup reminders so you get a text message or email from your insurance company when payment is due or if it is late. Most companies offer these options.
- If you can, pay your auto insurance premium in full every six months, that way you only have to deal with your payment twice a year.
- Ask your insurance company to move your due date if you're short on funds on your due date. This options is not always possible, but many carriers can accommodate it.
For more information about your auto insurance call us at 816.453.7722