Insurance Grace Period
Insurance policies stipulate a due date when a premium must be paid. In short term insurance, such as car insurance, the due date of the premium is usually on the first of each calendar month. The due date will also be indicated in the insurance schedule and policy contract.
The Insurance Grace Period is a specified period after the due date of the premium – during the grace period the insured person may still make the required payment. During the insurance grace period the insurance cover of the insured object, such as a car, will still be in place. For short-term insurance (including car insurance) the grace period is usually a maximum of 15 days after the due date of the premium.
Once the grace period has expired the insured person will have to pay a re-instatement fee if he wants the insurance to continue. If insurance is not paid for a month, there will be no cover during the month that no premium was paid.
Not only does one run the risk of suffering an unsecured loss, but, in most cases, you also loose your no-claim bonus if the insurance was “skipped” for a month. Please read the conditions that are applicable to grace periods and late payments in your policy document carefully; not all companies have the same conditions in place.