You missed a payment on your auto insurance policy. The agency sent you a letter. They will cancel your policy. What do you do?

This type of situation can occur for many reasons. Most commonly, the owner made a mistake. Your auto insurance company knows this. As a result, they typically offer a timeframe in which you can make your payment and catch up your policy. Other times, this may not be available.

The goal of any situation is to ensure your agent knows what is happening and why. There are additional steps you can take.

Can You Reinstate Your Policy?

Some auto insurance companies allow you to reinstate your policy. If this is possible, it tends to be the most beneficial option. However, you usually have a time frame in which to do so, so act accordingly.

Reinstating the policy allows the same insurer to offer it to you. This ensures you do not get a negative mark for not having coverage. If you were to seek out a new insurer or policy without existing coverage, this gap might cost you. Most often, there will be a reinstatement fee. The fee may seem excessive, but it may be less than having to get a new policy.

What Happens When They Cancel?

Depending on state laws, the insurer might notify the license bureau about the coverage loss. This is particularly likely if you have an SR-22.

In all cases, the cancellation means a gap in coverage occurs. This gap in coverage is high risk. During this time, any accident may not have coverage. Therefore, you should technically not get behind the wheel. The state might take action to limit your driving privileges as a result.

How to Fix the Problem

If you are facing non-payment cancellation, take action immediately.

• Call your car insurance provider. Discuss what is happening and why.
• Ask to have the policy reinstated. Pay the fee to do so.
• If this is not an option, begin to find new coverage immediately. This ensures you are without coverage for the shortest amount of time possible.
• Set up automatic payments if possible. This can reduce the risk of falling behind again.
• If your policy is too expensive to make payments, look for one with lower coverage levels. This might lead to policy savings. However, don't sacrifice too much coverage just to save costs.
• Ask your agent for a low-priced car insurance policy. Your insurance agent can likely help you make changes to keep the policy affordable.

These steps keep you safe. They also ensure other drivers on the road are safe. Do not put off getting help after a non-payment cancellation occurs. There are insurance companies willing to help most people in this situation.