What Is An Insurance Grace Period?
What are some of the most critical key policy dates to remember when it comes to your insurance? The start and end date for your policy are definitely things to keep in mind, but beyond that, you’ll also want to pay attention to stuff like your insurance grace period. If you’re in the dark on what that means, here’s what you’ll need to know to get up to speed.
Grace Periods In A Nutshell
An insurance grace period is the amount of time you have following your payment due date to get your premium to the insurance company before they cancel your policy. If you fail to get things in by the end of that grace period, the insurance company may levy a penalty against you (like a heavy late fee) or they might just cancel your coverage altogether.
How long does that grace period last? It could be a day, it could be a week, it might even be several weeks. It might come with a warning, or there might be no warning at all when your carrier drops you. It all depends on your insurance company and the state in which you live, as there is no national standard.
What is standard, though, is that when there is a grace period, it’s there so that you won’t lose your coverage just because you are a little late with a payment. There can sometimes be forces outside of your control, after all, but, it’s also important to remember that you should err on the side of caution and never drag it out with your grace period. Insurance companies don’t want to be on the hook for paying out damages to you while not having received a payment.
Also, it’s never a good idea to simply assume you’ll have a grace period. You’ll want to make certain that one exists with your carrier beforehand, and know exactly how long the grace period is. That way, if you ever do find yourself in a situation where you have to pay late, you know you’ll still be able to file a claim should something unexpected happen.
Lastly, you should know that if you’re constantly relying on the grace period to get your payments in, then that’s an issue you’ll want to address. It could just be that you’re getting forgetful with your bill, in which case setting up an automatic payment or a payment reminder might be a good idea.
If it’s the case that the payment due date isn’t working for you, you might be able to get it moved so that it fits better with your monthly pay schedule. Regardless, communication with the insurance carrier is a must, so be sure to talk to them to see if you can arrange for something that works and keeps all parties satisfied.