- October 22, 2020
- Posted by: admin
- Category: Uncategorized
Especially in the wake of the COVID-19 crisis, the state law of Massachusetts requires the insurance companies to make it easy for the policymakers to continue with their coverage. Insurance companies have been asked not to consider lapses or policy cancelations.
To comply with the law, companies are using the insurance grace period as a policy tool.
A Lowdown on Insurance Grace Period
When you apply for coverage, the company defines the total amount of time that you have to make the premium payments. If you fail to pay within the time limit, your coverage lapses. The exact period depends on the policy type and your insurer’s preferences. It could be anywhere between 24 hours and 30 days. The insurance company will communicate the grace period duration in your original policy contract. Any payments that come after the period could result in penalties as well.
How Does The Grace Period Work?
The grace period exists to protect you from losing coverage if you’re late with your payments. This is why the states regulate laws governing insurance grace periods. Most insurance companies keep the grace period to the minimum durations to generate quick cash inflows. They do so to cover damages in case they haven’t received premium payment. As long as the grace period is still in effect, your insurance company will be liable to pay for any services availed by the policyholder. If your policy is canceled at the end of the grace period, you’ll need to apply for the policy again.
You can also choose to reinstate the coverage. In this case, the insurer will first inspect the property to ensure that there were no temporary losses. They might again ask for a sizeable down payment or ask you to pay it in full. The more complicated the non-payment history, the more difficult it will be for you to shop for a new policy. Some insurance companies may even flag you as a ‘high-risk’ customer and offer high premiums.
Whether you’re struggling to shop for a new policy or pay the down payment—Western Mass Auto Insurance can help you out with your car insurance Springfield MA. We don’t believe in turning anyone away empty-handed. If you’re based in Springfield, Charlie Ross will help you secure a suitable policy, irrespective of your past payment record. Charlie has over 22 years of experience in dealing with the most complicated and hard-to-insure cases.