If you have State Farm auto insurance then you might be familiar with late payments and grace periods. State Farm has a grace period of 10 days for late car insurance payments and the actual grace period might vary depending on the State laws. If you have missed a car payment then you can pay the past-due premium without any late fees within the grace period.
- The grace period will come into action only if you miss a car insurance payment
- The time you have to wait between the start of coverage is known as a waiting period
- The grace period for car insurance varies depending on the insurance company as well as what type of car insurance you have purchased
- If you drive your car without insurance coverage then you might have to face various consequences like fines, legal consequences, license suspension, etc.
- If you fail to make the late payments within the grace period then your insurance policy will lapse and the insurance company won’t provide the coverage
What Is A Car Insurance Grace Period?
A car insurance grace period is a fixed time frame where car insurance holders are allowed to keep their coverage even if they miss a payment. The grace period will come into action only if you miss a car insurance payment. The grace period gives policyholders a chance to pay their due bill if they miss a due date because of circumstance that is out of their control. You should keep in mind that the grace period and waiting period are not the same things. When you purchase insurance coverage, you have to wait sometime until the policy goes into effect. The time you have to wait between the start of coverage is known as a waiting period. The grace period for car insurance varies depending on the insurance company as well as what type of car insurance you have purchased. Moreover, not all companies provide grace periods for their policyholders. Therefore, you should check your insurance policy to find out the due date as well as to see if it has any grace period. If the company offers a grace period then the policy will clearly include all the details of the grace period.
What Happens If You Miss an Auto Insurance Payment Deadline?
If you have auto insurance without a grace period and if you miss your premium payment deadline then you have to face lots of consequences. The first problem you will face is, that you won’t have coverage if you file a claim. Moreover, if you have the grace period and miss the due date then your coverage too will lapse despite the grace period. Moreover, you won’t be covered if you get into an accident. You have to pay the damage from your pocket. If you miss a car insurance payment or if there is any lapse on your payments then the insurance company will consider you a higher risk to insure and deny providing you required coverage. If you drive your car without insurance coverage then you might have to face the below consequences –
- Legal consequences
- License suspension
- Vehicle registration suspension
- Jail time
- Vehicle impoundment
- SR-22 filing requirements
- Community service
How Does a Grace Period Work?
If you have car insurance with a grace period then it can be very handy for you. Having a grace period means, that if you have late payments then you will still get the coverage for the grace period. Moreover, you will be able to clear the let payments without any penalties or late fees. However, you should keep in mind that if you fail to make the late payments within the grace period then your insurance policy will lapse, and the insurance provider will cancel your coverage. There is no standard grace period for insurance policies. Depending on the company and insurance type, the grace period can range from 24 hours to 30 days. If you fail to make an insurance payment then the company will send you a notice of cancellation. It will contain a deadline by which you have to make your payment to keep your policy in place.
Is There Any Penalty for Paying Premiums during the Grace Period?
If you make the late payments within the grace period then State Farm won’t charge a late fee. However, if you use the grace period more frequently then you might have to pay a fee to get your policy reinstated. Other common problems that you might face during your policy lapse are:
- The rate of your insurance might increase
- You won’t find batter coverage
- You will have extra out-of-pocket expenses
- There might be high-risk auto insurance rates
What to Do If you Can’t Afford the Car Insurance Payments?
It is a best practice to pay for your full car insurance upfront. If you are not able to pay your premium in full then you should try to negotiate a payment plan with your provider. An insurance plan will allow you to pay off your premium in monthly installments. However, you might have to pay small payment processing fees. If you think that your car insurance payments are high and you won’t be able to afford them then there are several ways you can reduce the insurance payments. Let’s check them out!
- Lower the Coverage: Car insurance comes with a variety of coverage and it is a key reason for having higher insurance payments. You should review your auto insurance policy because you might be paying for more coverage than you need. Moreover, you can also try to raise the deductible amount and it will lower your insurance payments.
- Shop New Coverage: You can compare quotes from different insurance companies and find the best yet affordable coverage for you. This way you might be able to pay fewer premiums than what you are paying now. Moreover, some insurance companies can offer you discounts when you try to switch the company.
- Find Discounts: State Farm has various discount offers and programs where you can enroll and get discounts of up to 30%. For example, you might become eligible for safe driving habits, owning a new vehicle, or selecting paperless billing. You can contact your insurance agent to find out more about the discounts.
- Bundle Policies: Many companies offer discounts on bundle policies. State Farm also offers a discount if you bundle multiple policies like auto insurance, homeowners insurance, etc. This way you will be able to qualify for a multi-policy discount.
Does State Farm Have Grace Period?
Yes, State Farm has a grace period and in most circumstances, it is 10 days. Depending on the State where you live and what type of insurance you have the grace period can vary. But you should keep in mind that if you fail to make the necessary payments within the grace period then State Farm will cancel the policy. If you have the auto pay enabled for your insurance payment then you will have a grace period of 15 days from State Farm. After 15 days you will be automatically charged by State Farm. If you fail to pay the owed amount, then State Farm will send you a notice of cancellation.
FAQS about What is State Farm’s Policy for Late Payment (Grace Period) by State
Does State Farm have a 30-day grace period?
No, State Farm doesn’t have a 30-day grace period. Depending on the type of State Farm insurance you have, you will get a grace period of 10 days from State Farm.
What happens if a premium payment is made late but within the grace period?
If you forget to make an insurance payment in time then there is nothing to worry about if you have a grace period. You can make the late payment in the grace period. And if you can pay all the late payments within the grace period then the policy will remain fully in effect.
Does State Farm have a cancellation fee?
No, State Farm doesn’t have a cancellation fee. If you have a State Farm insurance policy then you will be able to cancel the policy without any cancelation fees.
What happens if a premium due is not paid before the end of the grace period?
If you fail to clear all the premium dues before the end of the grace period then State Farm will cancel the insurance policy and terminate all the coverage.
What usually happens if the insured person dies during a grace period?
If the insured person died during the grace period then the beneficiary of the insurance policy will get the death benefit minus the past due premium.
Last Updated on November 16, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.