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Welcome to the best Michigan insurance resource! Michigan has the most unique insurance laws in the United States. Learn about what it takes to be insured properly as a Michigander. Get saving tips, mandatory coverage amounts, and answers to many frequently asked questions.

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What Happens If I Pay My Car Insurance Late?

It happens to everyone. Sometimes you just don’t have the funds you need when you need them. Other times you simply forget and the date slips by you. Whatever the reason, you may find out you paid your insurance bill late. Now is not the time to freak out depending on how late it is. If you don’t know what happens when you pay your car insurance late in Michigan then, you will find this helpful.

First, look at how late you are. Is it a day behind, a month, more or less? This is important to determine how late it will actually be. Did you already mail the check off, or did it just enter into your mind to do so? This is another determining factor in what happens.

Things You Should Expect

  • Late Fees
  • A Double Payment (the past due amount plus the current month’s payment)
  • No Reinstatement if it is a Second Offense

The unfortunate truth is that some insurance companies will temporarily suspend your insurance even if you are just a day or two late in paying. In insurance lingo, this is known as a lapse in your insurance policy. A lapse in your policy means that you are not insured and considered to be an illegal driver because of it.

Fortunately, most insurance companies are going to send you a notice that you are at risk of having your insurance policy lapse if they do not receive a payment within a certain amount of time. This could be a few hours or a few days. Your insurance company may opt for giving you a phone call in addition to written notification. If you do not contact your insurance company to work something out, or pay them, you should consider yourself as an uninsured driver. To make things even worse, some insurance companies will charge you a late fee per day until you make your insurance payment.

What Happens When it Lapses

After your insurance company lapses your insurance coverage, the last thing you want to do is be caught driving without insurance. If you get pulled over or you get in an accident, you could lose both your license and the registration of your vehicle. Then, you have to pay a reinstatement fee to get your license back and you have to pay to register your vehicle again. If you are alone in the vehicle, you could also end up having to pay an impound fee to get your vehicle back.

In some cases, you may even be facing jail time for getting in a car accident while you were unlicensed or uninsured. Whether or not this happens, depends on if you have previously driven without insurance before.

What Should You Do?

You have to keep in mind that insurance companies are not like the monster that lived under your bed when you were a child. They understand the hiccups in finances and unexpected expenses happen from time to time. In a lot of situations, an insurance company is more than willing to work out some kind of plan with you. Don’t push their willingness to help. Being late every month is not acceptable and will most likely result in your policy being cancelled.

The worst thing you can do in this situation is doing nothing. Call your insurance agent and let them know you are struggling to find the money to make your payment in time. Just tell them what’s going on and see if some kind of long term payment plan can be worked out. You can also ask if you can have a few days or an extra week to make a payment without having to worry about your insurance lapsing.

Your insurance provider has no way of knowing that you are struggling to find the money if you don’t tell them. Not telling them anything at all is when they just assume you are not going to pay them at all. Losing your status as an insured driver will make you a high risk driver. In Michigan that means when you do get your finances straightened out, you will be paying a much higher insurance rate for a full six months to get back to a preferred rate.

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2 comments

  1. Have you ever heard of a situation where you were late on your car insurance and while in the process of paying you caused an accident and your insurance company pays for your totaled vehicle but is able to get out of any other responsibility to the other driver who was not at fault.

    • Actually that is how it works in Michigan. In an at-fault accident, the at-fault driver’s policy does not cover the not at-fault driver’s damages. Everyone’s policy covers their own. The other driver would be able to file a mini tort claim against your policy if they do not have collision coverage or have up to a $1000 deductible on collision. A mini tort pays out a maximum of $1000. You must have limited property damage on your policy in order to be covered. If you do not have limited property damage the not at-fault driver could sue you for the 1k. I hope this helps. Please let me know if you have any other questions.

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