How Does A Car Insurance Grace Period Work?

When times get tough and money is tight, you have to maneuver ways to survive. Luckily, for those struggling with making payments on time, there is often a grace period initiative that allows for a little breather. The same goes for car insurance premiums, with many automotive insurers offering up to 10 days to rectify any late payments. Find out more about how a car insurance grace period works, what penalties are involved, and better ways to save money on your car insurance premium each month. 

What is a car insurance grace period?

A car insurance grace period is an allotted length of time given to insured drivers after they miss their payment due date. Typically speaking, it’s a chance for policyholders to pay their bill without experiencing a lapse in coverage.

How long do grace periods last?

It’s important to note not every insurance company upholds the same grace period. The amount of time will vary depending on which auto insurer you choose. For example, Geico offers policyholders to postpone their premium payment for up to 11 days. However, if a driver fails to resolve the bill beforehand, repercussions can follow. 

How does a grace period work?

If you can’t make your car insurance payment this month, the best thing to do is contact your insurance provider. Depending on the company, they’ll offer you a grace period, which could mean 24 hours or up to 30 days to pay your bill. Again, not every car insurance company offers grace periods so if you live on a tight budget it might help to plan ahead. Choose a car insurance company that with some leniency.  

Do car insurance grace periods include late fees?

The benefit of a car insurance grace period is that you will continue to receive coverage during the time you cannot make a payment. But for many drivers, late fees and policy penalties are a real concern. While most, not every, automotive insurer avoids charging late fees during the grace period, there are some circumstances when you’ll end up having to pay.

Essentially, if you take advantage of the grace period often, your car insurance company might make you pay an additional fee or you could suffer rate increases. To avoid this, don’t let grace periods happen frequently. Also, don’t forget to make your payment within the given time period. 

Looking for ways to decrease your car insurance payment? Follow these simple tips

When financial troubles disrupt your normal routine, it’s important to take action fast. While grace periods might work for a few months, you don’t want it to become a regular thing. It’s important not to fully rely on this added time allowance. We suggest policyholders do the following to help save money:

• Remove excess coverage
• Ask for a higher deductible 
• Search for discounts

While the grace period will save the day when you need it most, financial burdens can pile up quickly. Following these car insurance reduction tips will help policyholders avoid the pain-staking regret of lapse of coverage. Otherwise, do fret the next time you have to ease into a grace period. That’s exactly what it was designed for! 

For more information on saving money and car insurance, check out our informative blog post about Gabi Insurance.