Securing Your Financial Future: Why Paying Your Insurance Premiums On Time Matters

While Americans may be experiencing mixed emotions regarding the state of the economy today, most people can agree that inflation is on the rise.

The economic conditions have prompted many to reevaluate their household budget and cut back on unnecessary living expenses to weather the storm. While some bills and recurring debts can be negotiated or even eliminated, like television streaming services, memberships, and other subscription-based amenities, it’s crucial to prioritize paying the premiums for your home and auto insurance policies on time. This not only maximizes your annual savings but also safeguards your investments, providing greater financial security. It also helps you avoid the costly financial and legal implications often associated with an insurance non-payment.

Why It’s Important to Pay Your Insurance Premiums On Time

If you miss a payment, your insurance carrier may cancel your policy, causing a lapse in coverage. An insurance lapse is the duration of time you’re uninsured after your coverage ends. You have the option to purchase insurance again but you will likely be asked on the new application if you have been cancelled by a prior insurer. This can make you a less desirable applicant. In addition, securing a new policy is more complex than you may think. You could face denials from insurance carriers with low-risk tolerance or pay significantly higher premiums on a new policy with the same level of coverage. With home and auto insurance premiums predicted to rise, it is not uncommon for your rate to increase due to current market conditions and non-payment history.

The implications of a non-payment do not end with a rate increase. If your state laws require continuous coverage on any registered vehicle, a lapse may be considered a violation of that law. If you are not insured, you could be personally responsible the damages you, your car and other involved parties suffer. Most lenders typically require a comprehensive insurance policy if you financed your vehicle. Inadequate coverage or a lapsed or canceled policy can result in your lender reclaiming possession of your car or other consequences.

While having home insurance is not required by state law in Connecticut or Massachusetts, if you have a mortgage, your lender likely requires you to have an insurance policy in place. If you miss a payment on your homeowners premium and your coverage lapses, expires, or is terminated, your mortgage lender can view this as a breach of your obligations and may purchase a new policy and charge you for it afterward. With a new insurance policy and carrier in the mix, you could be subject to a complete home inspection and subsequent rate increases relating to any newfound risks and liabilities on or with your property. These potential consequences should serve as a cautionary reminder of the importance of timely insurance payments.

What to Do If You Miss an Insurance Payment

Missing an insurance payment doesn’t automatically mean your insurance carrier will cancel your policy, but as your trusted insurance agent, we strongly encourage you to avoid the risk of a policy cancellation by any means necessary. The best way to do this is to always pay your bill on time.

One of the simplest ways to ensure your insurance bill is paid on time is by setting up auto-pay through an electronic funds transfer. Additionally, paying your policy in full at the beginning of each coverage year is a smart strategy that can bring financial rewards. Many insurance carriers offer substantial discounts to policyholders who use auto-pay and pay in full, helping you save money and protect your financial future.

If you find yourself in a situation where you’ve missed a payment, please inform your Bearingstar insurance agent immediately. Our team will carefully review your policy and work with your insurance carrier to explore options for payment. If you’ve received a cancellation notice, we will advocate on your behalf with your insurance carrier, presenting your situation and proven on-time payment history. If your insurance company is unwilling to reinstate your policy, we will assist you in finding new insurance coverage.

Bearingstar Is Here for You Every Step of the Way

We may be facing uncertain economic times, but one thing is for sure: When you work with Bearingstar, you partner with an experienced insurance agent committed to helping you with all your insurance needs. We will ensure you have and maintain the right insurance coverage to protect your car, home, and other personal belongings. For assistance with a personal lines policy, a missed payment, or any other home insurance or auto insurance coverage needs, please get in touch with a member of our Massachusetts team by calling 877-801-7424 or a Connecticut Bearingstar professional by calling 888-519-9996.