If rainbows and puppies are at one end of the spectrum, where does peace of mind belong? Where would you put paying the bills?
There is plenty to suggest that inflationary pressures and rising interest rates have impacted our spending and borrowing habits. “The rubber meets the road” when those habits lead to late payments on auto insurance.
Paying on time keeps rates low by maintaining discounts and credits. The consequences of a late payment are inconvenient, expensive, and even illegal.
1) INCONVENIENT
At a minimum, late payments create an atmosphere of urgency and, if they aren’t made in time, policies will lapse. That can be EXPENSIVE.
2) EXPENSIVE
Insurance companies, not unlike credit cards, track payment history and that behavior impacts rates. Late or missed payments may result in expensive fees as well as the loss of credits or discounts upon renewal.
Reinstating or replacing an auto insurance policy that has lapsed for non-payment typically means paying the new policy in full, rather than monthly.
If an accident occurs during a lapse in coverage, the insurance company would decline coverage. A fender-bender may not feel like a big risk; imagine, however, an accident where people get injured. That’s why the average premium increase after a claim is a staggering 45% (Forbes Advisor, 3/12/2024).
Auto insurance premiums increased 50% from 2022-2024 (US Census Bureau & Quadrant Information Services) without adjusting for poor payment history. While an annual auto insurance policy “locks in” the rate for a year, rewriting a policy means losing credits and assuming today’s rates.
3) ...and ILLEGAL?
Many states require insurance by law. Failure to maintain insurance could lead to large fines and, in some cases, a vehicle may be towed and impounded. That brings us back to number one, INCONVENIENT.
RECOMMENDATION:
Avoid the hassle, the cost, and the risk of not having coverage if or when an accident occurs. Get peace of mind and, in most cases, save money with monthly, automatic payments.
Ready to learn more?
Acacia Insurance has been helping to make the unexpected uneventful since 1988, and we look forward to working with you. Please contact us with questions and for additional information.
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