A friend of mine was rear ended back in April. When she filed the claim with her insurance company, she was informed that her payment was late. It was supposed to be directly debited from her bank account (or so she thought), but hadn’t been. So she paid up on the spot. Long story short … her license got suspended for 90 days because she was ‘uninsured’ at the time of the accident. When she called her insurance company to ask WTF was going on, apparently it’s their ‘policy’ that if a payment is even one day late, the insurance is canceled, and the next payment starts a new policy.
It is standard procedure to cancel policies for non-payment, at least here in CA. Insurance laws will vary from state to state. It’s also standard procedure for the insurance company to notify the insured of their intent to cancel.
A Direct Debit rather than Standing Order? It’s an important distinction. Were there sufficient funds in the account at the time? Because if it was a DD, the insurance co are responsible for actioning the DD.
If they notify the insured of their intent to cancel, that implies that the cover does not lapse immediately the payment is late, as described by the OP.
There is no implied coverage for not paying your bill. If you haven’t paid the premium, you are not covered…that’s standard practice in the insurance industry.
It wouldn’t happen in NY for a payment that is late by a single day- but every insurance company I’ve dealt with sends a cancellation notice on the due date saying that the policy will be cancelled in 10 days if they haven’t received a payment. Must be the law, because at least 5 companies have done it that way. I suspect that if they received payment on day 11, it would be a new policy ( if they even accepted the payment).
With my insurance (Farmers) there is a 30 day grace peiriod. If the payment is late they send a “Notice of Cancellation” stating that unless the past due payment and the current payment are received within 30 days from the due date the policy will be canceled.
Yes. It’s happened to me before with State Farm with no notice at all. I think it depends on the carrier. One time USAA sent us a late notice and said our policy was in grace and pay ASAP.
I’ve had State Farm for 28 years. I ALWAYS get a cancellation notice about 30 days before the actual cancellation date. I think that you’re actually paid AHEAD by 30 days with them, thus your insurance isn’t cancelled on the date your next payment is due. That’s my understanding.
I wonder if there isn’t something missing about the OP, info wise, since it’s actually second hand info.