You might eventually find yourself unable to cover the cost of your auto insurance. Perhaps a family emergency, being laid off, or another unforeseen occurrence left you short on money. What occurs afterwards if you stop making motor car insurance payments?

There are numerous factors that will impact your finances.

Whatever the cause, stopping your auto insurance payments is a costly error that could have negative and long-lasting effects. Such a circumstance is something you wish to avoid. Therefore, it’s imperative to be fully informed of what might occur if you forget to make a payment and what you can do to remedy the situation.


What Takes Place If You Don’t Pay Your Auto Insurance on Time

Not all auto insurance providers provide their customers grace periods. A grace period is the time after the deadline when a policy is still in effect even when the premium hasn’t been paid.

If your insurance company gives you a grace period, it won’t instantly cancel your policy due to a late payment. Your coverage won’t cease if you pay your auto insurance late as long as you do it before the grace period expires.

Your insurer may contact you by mail or SMS a few days after your payment due date to remind you to pay your premium till a specific date to avoid your coverage lapse.


What Takes Place if Car Insurance Isn’t Paid

Late payments are one thing, but canceling your auto insurance payments completely is quite another. After your grace period expires, if you still haven’t paid the premium, it will have a negative impact not just on your insurance but also on your financial situation as a whole.

Here are potential outcomes if you stop making car insurance payments.


Your policy will be cancelled by the insurer.

You must continue to pay the premium for your auto insurance coverage on a monthly, quarterly, or annual basis, depending on the terms and conditions set forth by the insurer.

Your policy will be cancelled for non-payment whenever you stop paying your auto insurance premium. Insurance firms in the Philippines are legally permitted to cancel a coverage for reasons like non-payment of premiums under The Insurance Code (Republic Act 106070).

According to Insurance Commissioner Dennis Funa in his BusinessMirror column, nonpayment of the premium not only suspends coverage but also “puts an end to an insurance contract.”

Missed payments violate the terms and conditions of an auto insurance policy, which justifies cancellation. The law stipulates that the insurer must send the delinquent policyholder a notice of cancellation via mail or email in this situation.

Before canceling your coverage, the insurance provider should let you know when you cease paying for auto insurance (after any applicable grace period).


Your vehicle might be repossessed.

Did you get a loan to pay for your car? If you stop paying for auto insurance, you risk losing your car.

Lenders demand that borrowers maintain an active auto insurance coverage for the duration of the loan. Your auto loan provider may and will repossess the vehicle if you fall behind on your premium payments and it becomes uninsured.


You’ll lose your car insurance coverage.

What occurs if you stop making auto insurance payments? It’s as simple as losing your auto insurance. You won’t receive financial protection from the effects of car loss or damage brought on by an accident or any other tragic event.

You’ll be on the hook for auto repairs, medical bills, and other costs if your uninsured vehicle causes a collision. This can be very expensive. Unfortunately, since your policy has already expired, you are unable to file a claim with the insurance provider.

If the accident severely damaged your car and you can’t afford the repair costs, you won’t be able to drive it. If you use your car for work, the financial loss is greater.

If you caused an accident that harmed or killed someone or damaged someone else’s property and you don’t have enough money to cover the costs, you could be fined and put in jail for reckless imprudence.


Your credit score can decline.

What will happen if I don’t pay my car insurance? Your credit score will suffer is another response.

Your credit score can go up or down depending on how well you’ve paid your bills, including your auto insurance rates. It’s because insurance companies send the Credit Information Corporation information on the payments their customers make to them. Your credit report is then created using the data, and credit bureaus use it to determine your credit score.

Therefore, any missed or late payment could lower your credit score. Why should you care about your grade? You may find it challenging in the future to obtain a loan, credit card, mortgage, or another vehicle if you have a low credit score.


Your New Premium Could Increase

Some people who could no longer afford their premiums attempt to save money by skipping payments, unaware of the financial repercussions.

If you stop paying your auto insurance now, your next policy’s rate may increase.

If lenders learn that you have a history of failing to pay your insurance premiums, they will view you as a high-risk borrower. This implies that no one can count on you to pay for your auto insurance in whole and on time.

As a result, auto insurance companies are probably going to charge you a higher rate.


What to Do If You Miss an Insurance Payment for Your Car

What should you do now that you are aware of the consequences of not maintaining car insurance? You can’t go back and fix what you did, but at least you can lessen the damage.

What you can do is as follows.


Speak with Your Car Insurance Company

As soon as you receive a cancellation notice, get in touch with the auto insurance provider to find out what steps need to be taken to fix the situation or keep your coverage from expiring.

If only a few days have gone following the cancellation of your coverage, you could try negotiating a reinstatement with the insurer. If you’re able to explain the reasons why you stopped paying for car insurance, such as a loss of income or a death in the family, the car insurance company might take into account providing a payment alternative.

Your policy might be reinstated by the insurer when you pay the outstanding premium. It’s less expensive to reinstate your auto insurance even though you might have to pay a fee.


New Car Insurance Coverage

It is preferable to start over if reinstatement is not an option or if you are unable to pay your premium. Right now compare prices on new auto insurance policies.

Through the MGS Insurance motor car insurance platform, you can quickly compare rates from several suppliers and identify the best offers. Through MGS Insurance website, you can even submit an online application for a car insurance policy with a reasonable cost and the necessary coverage.


Never Again Miss a Payment

Try to avoid missing any payments now that your auto insurance is renewed. It is recommended to use an auto debit arrangement and have your premium routinely charged to your credit or debit card if you frequently fail to pay your expenses.

To pay your premium online, you can also use mobile wallets and online banking apps. Exclusively make sure to load your savings account or mobile wallet enough, or even better, utilize a different account just for your auto insurance and other regular monthly bills.




Stopping your auto insurance payments is one of the quickest ways to damage your personal finances. It would be better to avoid this than to stress yourself out after having your insurance coverage terminated.

Take every precaution to prevent missing a payment. Prioritize paying your premium by understanding your auto insurance computation and the terms and circumstances of your policy.


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