Did you realize that it could cost you more than a late fee when you make your insurance payments late? That's right, not only will you incur a late fee in most cases but also you are jeopardizing your current coverage and possibly your future rates.
Let's consider what is probably the worst-case consequence of making late insurance payments. If you cut it too close and send your payment too late, you may not even realize that your insurance policy was cancelled. Now you are driving around with no insurance coverage.
Receipt of your payment by the company does not necessarily constitute reinstatement of your policy. You think you're covered because you mailed the payment but that may not be the case. When the insurance company receives your payment after your policy was cancelled they may return it to you in the mail. In some cases, they may keep it and apply it to any balance you may still owe. You really have no idea what the status of your policy is but are assuming it's okay because you haven't received any notices yet and no phone call from the company or your local agent.
Now you have an accident and assume everything is okay because you mailed your payment. You're thinking "I'm covered" but in essence you are not; you just don't know it yet. You find out when you contact the insurance company to let them know about your accident and they inform you that you do not have any coverage. You insist that you do because you mailed your payment. They tell you that it was too late and that your money is being sent back as you speak.
Being involved in an auto accident without insurance coverage is not a good thing. You can loose your license even if it was not your fault. Many states have financial responsibility rules that apply to auto accident and can affect your driving privileges regardless of who is considered to be at fault.
Another consequence to consider is the fact that your insurance company may find that after reviewing your payment history that they no longer wish to insure you. They may issue a 'non-renewal' notice. This means that they are no longer willing to insure you when your policy expires. You will have to get an insurance policy from another carrier.
It is also possible that your insurance company would be willing to renew your policy but require that you pay in full for the entire term; not giving you the opportunity to make late payments. If you are unable to pay in full for the policy term you may decide to shop for a new policy; however you may find that other insurance carriers could also require that you pay in full.
Consider that you may also damage your insurance credit based score. Many insurance companies review your credit and prior insurance history when determining what rates to charge you. Having made previous late payments on your insurance policy could cost you extra dollars when you buy a new policy. You might have ordinarily qualified for better rates but because you made late payments on your previous policy your new one is going to be surcharged.
Contact your agent or the insurance company if you cannot make your payment on time. They will be able to provide you with information regarding any late fees or cancellation date. They may also be able to provide advice or propose an alternative solution.