Notices, Expirations and Cancellations
In California, an insurance carrier is required to give a minimum of 10 days notice before terminating coverage. Because of this many carriers have started putting the cancellation dates on their regular bills, which may cause a bit of confusion for their insured’s. Insured’s who experience this can rest at ease knowing that their carrier is only following the rules and regulations set forth by the states Department of Insurance.
The first thing that is important to realize is all bills should be paid by the due date, never rely on a grace period. If it is the end of your policy term there will not be a grace period since the contract has expired. This could leave the insured without coverage until the policy is renewed. Often times, people will mistake their cancellation date for the due date as well. If an insured makes sure their bill is paid before the date on the notice they should be fine every time.
Always try and pay before the date on the notice. If the bill says the policy will cancel on the day that the insured is planning on paying, it will be too late. Cancellations always occur at 12:01 am on the cancellation date, so right after midnight.
Insured’s should read all bills and notices. Don’t just throw them away and go into the office to pay, make sure there are no discrepancies or issues that need to be addressed. Many times carriers do not have separate envelopes for bills and correspondences and an insured may discard an important notice thinking it is just the monthly bill. Insured’s may also miss a cancellation date that they were unaware of.
Make sure the due date is correct. One of the biggest causes of cancellations for non-payment is assuming a due date. Most companies rely on a 30 day billing cycle. This means a bill will be due every 30 days and may move the date back and forth a few days. By opening and reading all bills the insured will never assume the wrong due date and risk a late payment or cancellation.
By paying before the due date insured’s will reduce the risk of late fees as well as cancellations. A lot of carriers have started adding late fees for payments even 1 day late. These usually range from 5-10 dollars and can add up over the course of a year.
If a consumer finds that they are being canceled often or having trouble keeping track of their payments they should take the time to open and read all notices sent from their carrier and pay all bills a bit early. This will help reduce the extra costs associated with late payments and cancellations.
Paul R Woodward
Bains & Woodward Insurance Services, Inc.