Sometimes even those with the best intentions can make mistakes and miss a bill payment deadline.
When the missed deadline is a payment for home insurance, many homeowners absolutely panic.
Will this cancel my policy? Is my home now unprotected until that payment is received by my agency?
These are all common questions asked by homeowners who, for a variety of reasons, have missed a home insurance payment.
The good news is that missing a deadline does not necessarily spell disaster as long as the problem is promptly corrected.
There Is Usually A Grace Period
Most home insurance companies set up policy expiration dates to offer their customers a little safety net just in case a payment is not made by the due date.
While this grace period should never be relied on, it's there in case the payment just doesn't get made on time.
The grace period might be as little as a week to as long as a full month.
You should find out your agency as soon as possible exactly how much grace time you have to make your payment.
What If You Miss the Grace Period Deadline Too?
When you miss a payment deadline but get the payment in before the grace period expires, no action will be taken by your home insurance agency.
Just continue paying on schedule according to the indicated due date.
If the grace period expires and you still have not made the payment, your agency may cancel your policy.
Once again, every insurance company has different rules about grace periods and policy cancellations, so it's essential that you speak with with them before assuming anything.
If you do so before the grace period expires, you may be able to work out a way to prevent your policy from lapsing while you catch up on your payments.
What Happens if Your Policy Lapses?
If your home insurance policy is cancelled and your coverage lapses, your home is no longer protected by the policy.
Anything that happens at that point will not be covered and you will be financially responsible for repairing any damage that occurs.
You are also at risk of having a liability lawsuit brought against you if someone is injured at your home while you have no coverage.
Policy lapses can also result in other problems.
You could have trouble getting new insurance as policy payment history is one of the personal details that home insurance agencies consider when deciding whether they want you as a customer.
If your home is mortgaged, your lender will have been alerted to the fact that the coverage has lapsed and could consider this a breach of contract.
The lender would have the right to repossess your home or obtain usually more costly insurance and add it to your mortgage payments.
Such basic coverage would not protect any personal belongings in the home or provide liability coverage.
A lapse in your homeowner's policy could also negatively affect your credit rating.
How Can You Avoid Allowing Your Policy to Lapse?
The best way to avoid lapses in your homeowner's policy is to always plan ahead for getting payments made.
Forgetting to mail a check or login to make a timely online payment is not usually a serious problem if you realize your mistake and quickly make the payment.
If the issue is financial in nature or there is some other significant reason why you can’t make the payment on time, call your agency and discuss it with them immediately.
Your home insurance provider can work with you to formulate a workable solution so you can avoid a lapse in coverage and still get the policy premium paid.
At The End of The Day
The moral of this story is that if you miss a payment deadline for your home insurance, don’t panic right away.
There is a grace period there to protect you while you get the payment in.
If you’re having problems making your payment, discuss it with your homeowners insurance agency immediately so you can work together to avoid a lapse in coverage!