What Is Car Insurance Grace Period?
Even if you are new in the auto insurance world, you’ve probably heard about the grace period. Find out what is it and how it works. Plus, it is recommended to get car insurance quotes whenever you plan switching carriers or renewing coverage.
A grace period is the amount of time you have to make your insurance payment after your normal due date. Paying within an agreed grace period will allow your insurance policy to continue without a lapse in insurance coverage. Many car insurance carriers offer a grace period. They can vary a lot per insurance carrier. Grace periods can certainly come in handy, but it is important not to overuse them. Grace periods may vary depending on:
- policy type
- insurance contract terms and underwriting
- by state or federal regulations
The insurance grace period gives people a fair chance to pay their insurance premiums in the event that something unexpected happens beyond their control, like a delay in mail delivery. It specifies he conditions of which a claim will, or will not be paid if the payment is received within the grace period.
There is not a standard grace period offered by all insurance carriers. It really varies by insurance policy and state. Some insurance policies come with grace periods of three days, while others offer up to 30 days. Some companies offer a short grace period with no late fee and an extended grace period which includes a late fee. Some states, such as New York, do not offer grace periods. High-risk policies usually offer shorter grace periods and come with higher late fees.
Some insurance carriers do allow clients to use their grace period every single month. But this is not recommended. First of all, late fees are often added to your payment when you pay in your grace period. Secondly, this may worry your insurer and make it reluctant in providing renewal.
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