When a driver falls behind on car insurance payments, insurers will suspend coverage, as would any service provider. While a single occurrence may not jeopardize the driver’s standing, repeated non-payment can result in the insurance company cancelling the policy and effectively interrupting insurance coverage.
If you’re paying car insurance monthly, you’re likely paying a month in advance. That is, when you make a payment on May 1, you’re in essence paying for June’s coverage. Paying your premium on May 3 won’t affect your coverage, and in most cases insurance companies won’t take action. If you are paying late on a chronic basis, or if you don’t make a payment within the current month, far more serious consequences could arise.
The Cancellation Process
If non-payment results in insurance company action, you will receive a registered letter advising you of the pending cancellation. Under most policy provisions across Canada, you will have 15 days from the time the registered letter is delivered to pay outstanding amounts before insurance coverage stops. Should this occur, the insurance company is no longer obligated to cover costs should you be in an accident. As well, you’d be violating laws mandating insurance coverage.
Any lapse in car insurance coverage creates a risk to a driver’s insurability and a chronic history of non-payment may follow the driver’s record from company to company. This can accumulate to the point that no insurance company will cover the driver through conventional car insurance policies.
Finding Coverage for the Hard-to-Insure Driver
When chronic non-payment has become a problem, a driver may have to search extensively for a company willing to provide a policy. The car insurance calculator on this page is a great way to start, as it connects to over 30 car insurance providers. Finding coverage is as simple as entering data into the calculator. The more complete the information entered, the more accurate the quote will be, though this is of course only an estimate. The driver will get some idea of which companies are willing to offer a policy based on non-payment history.
If conventional insurance doesn’t provide a solution, there is another option, although premiums through it are usually much more expensive. The Facility Association is an industry organization founded to serve the residual insurance market, those drivers who can’t obtain conventional insurance. The Association guarantees that insurance coverage is available to everyone who is eligible. While the Facility Association doesn’t issue insurance directly, it does arrange coverage through its membership. The Association does not provide services in Quebec, Manitoba, Saskatchewan or British Columbia, since these provinces offer private insurance and have other methods in place to serve the residual market. All remaining provinces and territories have access to Facility Association services.