Missed a Car Insurance Payment? Here's How to Resolve It

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Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on January 16, 2025

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated January 16, 2025

Visit author page

4 minute read

Article Contents

Car insurance is a legal requirement in Canada for a reason. It provides financial protection against accidents, theft, and liability. It also ensures that drivers can cover damages and medical expenses resulting from car-related incidents. But sometimes life gets in the way and you forget to make a car insurance payment on time. How does this impact your protection?

Missed Car Insurance Payments at a Glance

  • A missed car insurance payment can label you as a high-risk client in the eyes of insurers. This classification may lead to higher premiums when renewing your policy or difficulty obtaining new coverage in the future.
  • Driving without car insurance in Canada can result in fines, licence suspension, and vehicle impoundment.
  • To prevent future missed payments, consider enrolling in automatic payments. Autopay options ensure that your premiums are deducted automatically from your bank account or charged to your credit card on the due date, reducing the risk of forgetting

Missing a car insurance payment doesn’t just affect your present coverage – it affects your future rates and your credit score. Learn more about what to do if you miss a car insurance payment, how long non-payment stays on your record, and how to get new coverage if your policy is cancelled.

Consequences of Missing a Car Insurance Payment in Canada

When you miss a car insurance payment in Canada, the consequences can vary depending on your policy’s terms and conditions. Here are some of the effects that it can have on your finances and future insurance coverage.

Immediate notification of missed payment:

Most Canadian auto insurers will notify you shortly after a missed payment. This notification may come via email, text, or a phone call.

Tolling of grace period:

Your notice of missed payment will also include a “grace period” informing you until when you have to make that payment to avoid penalties like late fees or loss of coverage. Depending on your insurer, this grace period typically lasts a few days to a month. Keep in mind that your car insurance coverage remains effective during your policy’s grace period. This gives you the chance to catch up on your missed payment without letting your coverage lapse.

Late fees:

If you miss a payment, your car insurer may charge late fees. These fees can accumulate quickly, increasing your overall insurance costs.

Policy cancellation:

If the missed payment remains unpaid after the grace period, your insurer may cancel your policy. This cancellation will lead to a lapse in coverage, which can have serious implications for your ability to drive legally and safely.

Decreased credit rating:

Some insurers report missed premium payments to credit bureaus, which can negatively impact your credit score. This can result in serious financial consequences such as higher interest rates for loans, rejected loan applications, or even difficulties renting property.

What Happens After You Miss a Car Insurance Payment

Resolving the Issue Step-By-Step

Sometimes, your insurance premium payment slips your mind or it doesn’t go through with your credit card or bank account. If you realize you’ve missed a car insurance payment, here’s what you can do:

Reach out to your insurance company as soon as possible. Explain your situation and ask about options available to avoid cancellation. If this is your first missed payment, insurers are often more lenient and may provide a longer grace period (if one is provided) or waive late fees.

Inquire about the grace period and how long it lasts. If you’re still within that period, make payment ASAP to maintain your auto coverage.

If you’re facing financial difficulties that prevent immediate payment, ask if your insurer can set up a more manageable payment plan.

Be aware of any late fees that might apply and factor them into your budget when making the overdue premium payment.

Most insurers are willing to work with clients to help them find solutions that avoid policy cancellation, so stay in touch and relay your concerns to your car insurer as soon as they arise.

It’s also important to take care of late payments immediately to prevent fees, coverage interruption, and legal penalties for driving without car insurance. For example, Albert’s Traffic Safety Act expressly fines offenders a minimum of $2,500 for the first violation, with escalating fines and even imprisonment for subsequent offences – and other provinces have similar laws.

What Steps Should I Take to Get Auto Insurance After My Policy Was Cancelled?

Securing a new auto insurance policy after having the previous one cancelled for non-payment poses some challenges. But fret not – you can still get coverage by being upfront about your policy history, shopping around, and looking at high-risk insurance options. Learn more about what you can do to get new car insurance – read our guide on how to get car insurance after cancellation in Ontario.

How to Make Sure I Don’t Accidentally Miss a Payment in the Future

Life happens, and it’s all too easy to overlook your car insurance payments. Here are a few simple tricks to make sure you never miss another payment and your policy stays in force:

Set up auto-pay:

This is the easiest fix. Most car insurance companies let you set up automatic payments through your bank account or credit card. Once it’s set up, you’re good to go. Just keep an eye on your account to make sure there’s enough cash to cover the payment.

Get payment reminders:

If you prefer to pay manually, set a reminder for yourself. Use your phone, email, or even a sticky note on the fridge – whatever works for you. Give yourself a heads-up a few days before the due date so it doesn’t sneak up on you.

Time insurance payments with your payday:

If you’re paid bi-weekly, line up your insurance payment to come out right after payday. That way, you know the money is there, and you’re not scrambling to figure it out later. Most insurance companies can help you tweak your payment date – just give them a call.

Update your contact info:

Make sure your insurance company has the right email address, phone number, and mailing address for you. It might seem small, but if you’re missing reminders because they’re going to an old email, that’s an easy problem to fix.

Keep a little back-up fund:

Sometimes an unexpected bill will come up or your car needs a pricey repair. Keeping a small amount as a “buffer” in your bank account for your car insurance can help you stay covered, even when things get tight.

Double-check your payment details:

If your payment is set up through a credit card or bank account, make sure your details are current. Cards expire, accounts change – and those little hiccups can lead to missed payments if you’re not careful. Update your insurer as soon as anything changes.

Key Advice from MyChoice

  • When seeking new car insurance after a cancellation, be honest about your history and explore all available options.
  • Communicate with your insurer as soon as you realize you’ve missed a payment. They may offer options such as extending the grace period or setting up a new payment plan.
  • Review your car insurance coverage regularly to ensure that it still meets your needs within your budget. You may find that making adjustments like having a higher deductible or removing endorsements you don’t need can help you save money without compromising coverage.

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