Is my insurance company allowed to cancel my policy for 1unpaid monthly premium payment and is there any kind of grace period.
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UPDATED: Sep 25, 2011
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Insurance Question from Miami, OK
Asked on 09/25/2011
Is my insurance company allowed to cancel my policy for 1unpaid monthly premium payment and is there any kind of grace period. My wife recently wrecked our new car. The insurance premiums are paid monthly automatically from my savings account. Last month my payment was not made due to insufficient funds in my account, $.63 to be exact. My bank has covered every payment for the last 4 years if I didn't have enough money in my account and has covered 2 transactions since as well. I never recieved notification of cancellation we just found out when we filed the claim on the car.
Answer given on September 25, 2011
Most insurance companies have some sort of grace period for the payment of premiums. If you have automatic deductions there should still be a grace period. You should check with your agent to see if there is a grace period for your company and how it works. If htere is a grace period, ask them to find out when the cancellation notice was sent. Companies also usually try to withdraw the money more than one time before a notice is sent to the policyholder.If there is a grace period, the insurance company is required to send a notice, usually a 10 day notice. However, they are not required to send it certified mail, only in regular mail. They are not responsible if the mail is not delivered or received.Your bank usually sends a notice to you if you are overdrawn. While it usually takes a few days to send the notice, it seems it would have been received by you before the policy cancelled.
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