What if we stop paying for car insurance?

With the prolonged economic crisis that we are suffering, the temptation to save by default car insurance is very high. But one thing is clear: stop paying insurance can end up costing you dearly.

The first thing to consider is that car insurance is paid in advance, before they enjoy their coverage. The premium paid over this year covers during this time, until the next renewal, if it occurs. Stop paying means that the vehicle is left without any protection.

A second aspect is that, generally, the policy is automatically renewed if not notified in good time (which is expressly stipulated in the contract signed between the client and the insurance company). If you can not (or do not want) to continue paying this coverage, you must notify the insurer in advance of 30 days, that insurance is not renewed for another year automatically.

 We try to accommodate the insurance payment to the ability of our income

Therefore, we must try to accommodate the insurance payment to earning capacity, plan it so they do not get together with many other expenses and no money is available to meet that commitment.

Usually the premium is paid annually, but most allow insurers also pay each semester, trimester and even some every month. Yes, we get paid in easy installments but at the cost of paying interests that may be too high.

A month grace

But if, despite these warnings and considerations, decides not to pay for insurance, you should know that the insurance company is obliged to grant a grace month despite customer has not paid the premium. This means that during that month insurance covering you will you and your vehicle even though you have paid the policy. Take more than that month grace in pay for insurance means that the vehicle is left without any coverage.

 The insurance company is obliged to grant a grace month during which still secured

If the car, motorcycle or any other motor vehicle, flowing through streets and roads without insurance, the fine can amount to 3,000 euros as we told you a few days ago when the director of the Directorate General of Traffic (DGT) warned at the Barcelona Motor Show will soon be able to register their cameras tuition and fining drivers traveling without car insurance in force.

In addition, if a claim with the unpaid policy occurs, the insurance company has no obligation to cover it. Precisely because insurance has not been paid in a timely manner. This means that in case of accident, the customer will have to respond with its own assets before any damage because it does not have the insurance protection.

  You drive with a vehicle without insurance is not only unwise, it is unlawful

Delay or non-payment of the insurance premium car can pose serious problems and consequences, not only economic, in the case of some sinister in that time period. Circular with an uninsured vehicle is an illegality which aggravates the situation of the driver in case of being involved in an accident, although not to blame for this. For that reason, stop paying insurance can be very expensive in the end.

Pay in installments, an option

But what if you do not have money to pay for insurance? One option is to split the payment of the premium. Virtually all insurance companies allow the semi-annual or quarterly payment. And there are even insurance companies that provide more facilities and support the monthly payment of the policy premium. But not free installment payment out: the surcharge can be as high as 30% ...

Another issue that should be very clear: although insurance companies allow payment of the premium in installments and not pay one of those installments equivalent to not pay the lump sum. This is because, despite those payment facilities, the annual premium for car insurance is considered in its indivisible whole.

In the event that the customer does not pay one of the deadlines set in the contract, the insurance coverage would be suspended one month after the date set for payment. Because, before a default, the insurance company is obligated to continue to provide coverage to the policyholder of the premium for the month of grace explained above. The insurance is valid for all purposes, even if unpaid, during that month. Do not forget that coverage is lost but the customer has five months to pay and recover your insurance.

Unless the contract has been terminated because during the six months following the expiry of the premium, the insurance coverage would be in force 24 hours from the date on which the payment was made.

In the case of non-payment of the first installment of insurance by the customer, the insurance company has two options, A, demand full payment of the insurance. And two, that is the most common, terminate the contract for the first default, terminate it.

Claims are not too frequent

During the 6 months following the date of the premium, the insurance company has the right to reclaim by executive to pay the amounts you owe the policy. However, the costs of the procedure do not compensate, and as a general rule, insurers try to avoid the executive process. Typically, the insurer is limited to terminate the contract that bound him to the client through the policy. The default will have no more effect if the company understand it as the end of the policy and does not exercise its right to claim it should.

If the insurance amount not claimed within that period of six months, the only consequence for the customer is that your insurance contract has been terminated. In other words, it ceases to exist relationship between the insured and their insurance company.

Should have other insurance policies with the same company, it is very likely that the insurer take measures to ensure that does not happen the same with car insurance. You should also be very aware that being a defaulter in a safe can hinder you hire other policies.

 We have five months to pay and recover insurance protection

But we must not forget that while it is true that take more than a month in pay leaves you without coverage, not less true that accounts five months term (six months after the expiration of the policy, in which the company insurance can demand payment of the amounts due, minus the grace month) to pay and recover your insurance protection.

Above all, you must be very clear that compensates you make an effort to squeeze further belt, or look for potential savings in other types of expenses, and continue paying religiously for protecting your vehicle and yourself. Because do not forget, stop paying car insurance can be very expensive. And not only for the pocket.