Is there a grace period if my car insurance lapses?

Yes, most car insurance companies have a grace period for late payments. Car insurance grace periods can be anywhere from 1 to 30 days depending on your insurance company how much time you have to make a payment before your coverage is canceled.

An insurance company generally will issue a notice of cancellation within a few days of your missed due date. This notice states the final date your provider will accept payment to keep your policy active. Paying within the allotted grace period will allow your insurance to continue without a lapse in coverage.… read full answer

Grace Period by Company

Insurance companies are not very transparent about their late payment grace periods. In most cases, the grace period is highly dependent on state law but most often ranges from 1 to 10 days.

Grace periods ensure that even if you pay late, your coverage is intact. You can file a claim for an accident that happened during your grace period, and those claims are usually covered. You’ll need to get caught up on your payment before making a claim, though, and you need to do so before the end of the grace period.

If you don’t have a grace period or you miss the deadline, you won’t be covered for a claim. Your coverage stops at the end of the grace period. If you get into an accident even one day after, you’re on your own, leaving you personally liable for any damages.

Lapses in coverage also make you seem like a higher risk to the insurance company and will probably result in more expensive premiums when you go to get insurance the next time. You could face legal consequences, too – like fines, license suspensions, and even jail time – if you’re caught driving without insurance.

You should pay your car insurance bill once or twice a year in most cases. How often you pay car insurance premiums depends on the company and your preferences, but annual or semi-annual payments are best. That’s because most car insurance policies last six or 12 months, and most car insurance companies give a discount – as much as 20% – for paying your premium in full upfront.… read full answer

Most people either pay in full or choose monthly installments, but your insurer may also offer quarterly payment plans, meaning you’d pay every three months (four times a year). You may want to think twice before choosing one of the more frequent payment options, however.

The more frequently you pay, the more your coverage is likely to cost, due to:

• Higher Premiums. If your insurance premium costs $1,000 a year, your insurer might charge slightly more than $83.33 per month (how the math works out if you divide by 12) if you want to pay monthly. They might charge $87.50 per month, for example, bringing your annual total to $1,050. The extra cost is needed to cover additional administrative expenses associated with monthly billing.
• Fees and Penalties. There often are processing fees for electronic payment methods like bank transfers and credit cards. They apply to each payment, so fewer payments means fewer fees. There’s also the added risk that you’ll forget a payment when you add more due dates to the mix, and that could result in late fees as well as penalties for lapsed coverage.

Remember, you are required to pay your bill in advance to be covered, but how far in advance depends on your preferences and the insurer’s policies. On a monthly payment plan, you’re paying for next month’s coverage in advance. If you miss a payment or pay late, you’ll be left uninsured. The insurer must collect the premium for your policy to be binding and up-to-date.

Finally, it’s worth noting that most car insurance quotes are based on a six-month policy paid in full at the beginning of each term. But insurers generally have other options available. Before you pick a payment plan, make sure you’re clear on the details and ask about other discounts you may qualify for.

Geico has a nine-day grace period if you can’t make your payment on time. After that, your policy might be canceled. Geico does not have a late payment fee, but if you miss a payment, they will send a formal cancellation notice within 14 days of the original due date. The notice will state the final date Geico will accept payment to avoid a lapse in coverage. If you do not settle the bill by that date, your insurance will be canceled.… read full answer

There is no standard grace period offered by all insurance companies. Geico extends this grace period as a courtesy to their customers.

What if I get into an accident during my grace period?

If you are involved in an accident during the Geico grace period, damages will be covered as normal, according to your policy details. Outside of the nine-day grace period, though, you might not be covered and would have to pay for any damages out of pocket. For example, let’s say your payment was due January 1. You missed the payment, and on January 14, you rear-end another driver at a red light. You received a notice from Geico that your policy would be canceled on January 24 if you didn’t make a payment by that date. If you pay your premium right away, are you covered? Maybe.

Geico is within their rights to deny coverage for your January 14 claim. You pay car insurance in advance, and since you missed your premium payment and were outside of the grace period, you technically didn’t have insurance. Geico may be willing to honor the cutoff date of January 24 provided in your formal notice, but they don’t have to. If you make a late payment outside the grace period and immediately turn around and file a claim, you can expect any insurance company to question and possibly deny the claim.

This is the biggest reason why a grace period is not meant to be a default due date—it increases the risk of letting your coverage lapse by mistake, leaving you without insurance.

What if I’m enrolled in autopay?

When you set up your policy, you can enroll in automatic payments to ensure your premiums are paid on time and your coverage doesn’t lapse. But if you need to, you can still adjust your payment plans by logging into your online account and selecting the “Postpone” option under “Automatic Payments.”

If you do not see the “Postpone” option available, you may not be eligible to delay payment. This can happen for any of these reasons:

• You have already postponed your scheduled payment.
• Geico has already processed the scheduled payment.
• The current date is not within 11 days of the payment due date.