Life happens. The car breaks down, the kids get sick, an appliance fails. When the insurance bill arrives, you have every intention of paying it, but somehow you forget. The next thing you know, a cancellation notice arrives. You plan on logging in an making the payment in the portal, but yet again, Murphy’s law intervenes and daily life gets in the way.

Coverage lapse

A few weeks later, you’re involved in an auto accident. When you call your Rathbun Account Manager, you’re told a notice was sent before coverage was canceled. You have no insurance and the policy can’t be reinstated to cover the loss.

Unlike a missed cellphone payment, with auto insurance, there is typically no grace period. Your policy will expire at 12:01 a.m. following the expiration date if you miss the payment. While there may be some insurance companies that allow their customers to delay payments by a few days, you should contact your Rathbun Account Manager before a delayed payment happens to see if this option is available to you.

If your vehicle is financed and there is a lapse in coverage, a lender may purchase an insurance policy to cover the vehicle and bill you for it. If the insurance premium remains unpaid, your lender may repossess the vehicle.

Reinstating a policy

Reinstating an insurance policy isn't like reinstating your cable TV, with a flip of a switch. 

An insurance company may be willing to reinstate your policy if you didn’t experience a loss during the lapse. If a policy has only been canceled for a short amount of time, say under 30 days, and you have a good payment history, then your policy may be reinstated.

While your insurance company can issue a new policy starting the next day, you will still show a lapse in coverage. And any losses that happened during that time will not be covered. There may also be a fee associated with reinstating your policy. In addition, your insurance company may raise your premiums on the newly issued policy.

Your insurance company will backdate your coverage only when you have signed a document stating you’ve had no losses during the coverage lapse. Backdating is particularly important in auto insurance policies because many states require drivers to maintain continuous insurance coverage.

Typically, missed premium payments are handled the same way in all lines of insurance. Most insurance companies offer several different payment plan options for your convenience, such as paying on a monthly, quarterly or yearly basis.

If you’re concerned about potentially missing an auto insurance payment and would like to discuss the payment options available to you, contact your Rathbun Account Manager and begin the discussion sooner rather than later – before that ball gets dropped – to avoid any negative repercussions.