When you get insurance, you are going to have to pay for it. This comes in the form of a premium. Think of your premium as the price you pay for an insurer to offer you your coverage.
Like with every service, most insurers don’t like it when you don’t pay your bill. Therefore, like an electrician can cut off your lights, an insurer can cut off your coverage. Coverage termination from missed payments is often one of the primary reasons insurance customers lose their policies.
The Penalties of Terminated Insurance Coverage
Let’s say you don’t pay your car insurance premium for several months. As a result, your insurer cancels your auto policy. The termination of your policy means that you now no longer have car insurance. As a result, you leave yourself financially exposed. You might be unable to pay for car damage, or cover the bills for damage you caused to you others.
Not only that, you’ll likely face penalties from other sources. For example, most states require drivers to carry car insurance. If your coverage gets cancelled, you might face fines, license suspension and more. Don’t let this happen to you.
You might notice penalties from insurance providers as well. Some insurers refuse to re-insure those whose policies they terminate. Others raise rates for customers who have previous cancellations on their insurance records. As a result, you often find it beneficial to your wallet if you never let your policy get cancelled.
Preventing Coverage Terminations
Work with your insurer to make sure you avoid missing your premiums. There are a lot of different steps you can take to keep the risks of losing coverage to a minimum:
- Set up automatic payments. The funds will deduct directly from your bank account. This might help guarantee your insurer receives your policy premiums every month.
- Work to negotiate an affordable premium. Your agent can often find discounts or coverage adjustments to make premiums affordable. Therefore, you likely won’t have to worry whether you have the money to pay your premium.
- Establish a payment timeline that works for you. Sometimes, you can pay premiums monthly, quarterly and even annually.
- Always know the date your policy expires or rolls over. Often, you can set up your policy to renew year over year.
Call Knight-Dik Insurance today at 800-286-6353. We are going to be your first advocate if you ever experience problems with paying your bill. With the appropriate care, you never have to worry about your policy getting canceled.