What Happens If You Don’t Pay Your Car Insurance?
The to-the-point answer is, ”Your policy will lapse, and you won’t have coverage” So if you drive your car with a lapsed car insurance coverage-it will be illegal, and you will not get any coverage for your car issues, if you face a car accident!
Nobody wants to keep unpaid their car insurance. But sometimes, few might forcefully face a situation of unpaid insurance premiums on time. This situation is uncertain, but it happens. What should the policyholder do?
Suppose you are an owner of car insurance and are getting tensed if the same happens to you. However, if you know what can happen if you unpaid the premium provably, you can take proper measures to reduce the negative impacts of filling each cover lapse.
So let’s know first what is car insurance premiums and how you have to pay them. A car insurance premium is a value against your car insurance which you have to pay monthly to your insurance maker. The amount of your car insurance premium usually depends on several factors like the Driving history of the policyholder, age, living place, type of car, driving time, and so on, depending on the state and the insurance maker.
So, what are the systems to pay the insurance premiums? There are multiple options. Like-
- Monthly Debit Order
- Directly Pay the Cash at the Insurance Company’s Office
- Online paying (through mobile apps or now the company website)
- Mailing the Check Monthly
- Yearly Payments /Payment at once (this option is a pretty money saver, as maximum insurers offer a discount on one-time premium giving)
What Will Happen If You Don’t Pay Your Car Insurance?
Intentionally or unintentionally, if you don’t pay any insurance, it is going to affect your insurance benefits. So car insurance is also similar to this. If forcefully or intentionally you missed your payment installation on time, the following things can happen to you-
Your insurer will give you a gentle reminder:
It is the first consequence. It will happen to you from your insurance maker just after you have skipped your payments. They will mail you a gentle reminder so that you pay the premium. Just after a few days pass, they will send this reminder through mail or text message. After a few days, some insurers might add a Late Fee from you for this late installment if you pay the premiums. If possible, you should set your premium issues in this phase anyhow. However, if still, you still missed it, the following matter is waiting to happen with you-
You will (might) not be Covered If any Issue Happens with your Car:
If you miss one or more than one premium, you might have a chance to become uncovered by your insurance maker if any accident happens with or by your Car.
So if you or your car is facing (while driving your Car) accidents, any damage happens to your Car, you will miss all the reimbursement of the car damage or medical costs. So every price you have to count from your savings.
You can Pull-Over By The Police:
It’s an additional risk that might happen if you are not continuing your premium giving on time. If your insurer does not cover you after any damage or car accident happens, that means you do not maintain the state law. When your insurance does not protect you, it does not bear any means to have insurance for you. Instead of being pulled over by the police, you also can face a penalty or fine for anybody’s injury, or car damage liability on the road.
Your Premium Will Increase:
After your policymaker reminder, if you do not set your premium issues, they will cancel your car insurance. So you have to purchase one new policy for your car security (as it is state law). And the complex matter is that you have to count an increased charge for each monthly premium in that case. This is because if you apply for new insurance, your insurer will investigate your previous insurance history, and they will find you are irregular on your last insurance. So at that time, they will take you as a risk client who bears a chance to miss the premium on time. And that’s why they will drastically increase your premium than your previous one.
Will Impacts on Your Credit Score:
You have a chance to hand it over to a collection agency by the insurance company. This collection agency will continuously pay for paying any debt. According to PolicyGenius, if you have a Debt collection, it will badly impact your credit score. Like-
You will face difficulties for
- Rent/buy a new home
- Lease/Buy a new vehicle
- Apply for a new vehicle
- Apply for a New Credit Card
- Make Any Investments
The final step is losing your Car:
The final consequence might happen to you if you do not pay the payments on time. Car insurers sell you insurance to agree that they will look after your Car and you against a fixed premium on a set time. So if you break this agreement, at first, you will lose your coverage from any car damage or injury from your insurer. And if you have a loan for financing your vehicle, your lenders bear the right to take back the car for any of your faults.