Getting into a crash in your car is not something you either want or expect to happen. When it does happen, you are thrown off balance as you, your car and your passengers may have been injured.
You will likely have to contact your car insurance company or wait to hear from the at –fault driver’s insurer before you can establish whether you will be compensated in any way for the accident. If you believe you should be be compensated for the accident, talk with a lawyer.
How a Grace Period Works
One of the worst things about a car accident is whether you remembered to renew your insurance policy when the 12 month period expired. Most insurers these days offer a grace period to give you a chance to get the money together to pay your annual premium.
Some insurance companies usually offer a 10 day grace period to give you time to renew your policy. If you fail to do this you may find that you have to make a new application, which could result in some changes being made to your policy. Once that grace period has run out you won’t be covered by your insurance policy.
Grace Period for a New Car
If you are insured, you should have a grace period when you purchase a new vehicle. It will be covered by your existing policy for the pre-determined amount of time as specified in your existing insurance policy.
Auto insurance coverage is required in almost all states. Also, any lender will not finance a car without full coverage insurance. If you cannot provide proof of existing insurance, car dealers will not sell you the vehicle and the lender will not finance the car.
Depending on the insurance coverage, you have anywhere from 3 days to 30 days to notify your insurance company of the new vehicle and provide the necessary details so it can be added onto your existing policy. Failure to properly notify the insurance policy will result in the vehicle not being covered.
If you don’t have the proper coverage on a vehicle that is financed, the lender can repossess it. It is also in violation of state law, so if you are caught driving without insurance, you can face harsh penalties and fines. In some states, you could even have your driver’s license suspended if you drive without the required insurance coverage.
Can I Use My Grace Period Every Month
When you have car insurance, you have a set due date every month to pay your premium. Most car insurance carrier offer a grace period, but not all are the same and can vary significantly depending on the state laws and the insurance company.
While grace periods can come in handy sometimes, you should not overuse the opportunity to have a few days leeway. While everyone faces difficult times when a few extra days to pay a bill can come in handy, you shouldn’t get yourself in that predicament every month.
If you become overly dependent on your auto insurance coverage grace period, you can end up in a real tight spot. A grace period is the amount of time that you have to make your insurance payment after your regular due date before your insurance coverage is cancelled.
When you pay within the allotted grace period, your policy will continue without a lapse in your coverage. Your policy remains in full force during that grace period, but if you don’t pay the premium by the last day of the grace period, you will lose your insurance coverage.
There isn’t a standard grace period offered by all insurance carrier, and it varies by the insurance carrier, your policy, and your state of residence. Some insurance policies have a brief grace period of only three days, but some have an extended grace period that could be as long as 30 days.
Some insurers have a short grace period that doesn’t charge a late fee and an extended grace period that includes a late fee. You should ask your insurance agent or read over your policy to learn more about your grace period in detail.
You need to familiarize yourself with your insurance company and whether they offer a grace period. Not all insurance companies offer a grace period for all their insurance policies. New York is one state that doesn’t offer its insured customers a grace period.
You are more likely to have a grace period if you are insured by a preferred insurance company rather than a high-risk insurer. High-risk insurers that do offer a grace period usually offer a shorter grace period and a higher late fee.
A grace period shouldn’t be viewed as a requirement, but as a perk of an insurance policy. Don’t automatically assume that any car insurance policy you purchase comes with a grace period.
While some insurance carriers will allow their customers to use their grace periods every month, it isn’t a wise decision to do that. When you use a grace period every month, it can negatively affect your insurance policy in the future.
When you pay during the grace period for your policy, you will have late fees added. Those late fees could be as much as $20 each. When you add that fee to your regular insurance premium, it can significantly increase your auto insurance costs.
When you pay during the grace period, it can delay any changes you are wanting to make to your insurance policy. Most insurance companies will not process any change requests until you have paid your monthly premium. So delaying your payment can increase the chance of errors in your coverage because it delays the changes you need to have made to your policy.
At the end of your grace period, if payment isn’t made, then your insurance policy will be cancelled by the insurance company. In that situation, you are breaking the law in most states. Only Virginia and New Hampshire don’t require auto insurance coverage.
You should also know when your policy expires because many insurers don’t allow grace periods for renewal payments, which occur during the last payment of the period. If you fail to make a timely payment in this situation, you could have a lapse in coverage.
If your coverage does ever lapse, you want to have a proven track record. If you pay during the grace period time and time again, it could reduce your chances of having your coverage reinstated.
How Does a Crash Affect Your Auto Insurance?
Some drivers that they are involved in an accident don’t bother filing an insurance claim unless there is financial pressure to do so. This is because they are afraid they will be confronted with a rise in their auto insurance rates to the point of becoming unaffordable.
This doesn’t always happen and typically depends on the insurance company; what the cause of the accident is and if the policy holder has accident forgiveness. The sorts of factors your insurer may consider when renewing your insurance are:
- How much damage was done may lead to an increase in your rate;
- If you weren’t the at fault driver it’s likely your premium will remain unchanged. But this is not always true if you reside in a no-fault state because both insurance companies are responsible for paying some of the costs, so your rates will probably rise despite the cause of the collision;
- If you have built up a long safe driving history and you are a loyal customer you may see less rise in premiums that a driver with a poor driving record;
- Some insurers offer accident forgiveness to reward good drivers so the first accident will not incur any rise in rates.
Work With a Personal Injury Lawyer
If you are involved in a car accident and it’s not your fault it’s likely you will be seeking compensation from the at fault driver’s insurer. You will need an experienced personal injury attorney to present your case if you expect to get the amount you are entitled to which covers your financial hardship caused by the accident. Complete the Free Case Evaluation on this page to get started.
