Missed car insurance payment – what are the consequences?
It’s easy to miss a payment deadline. Maybe you forgot to set a reminder or there weren’t enough funds in your account to cover the payment.
It could even be a computer glitch where the payment fails to process through no fault of your own.
So what happens if you miss a car insurance payment?
It’s easy to miss a payment deadline. Maybe you forgot to set a reminder or there weren’t enough funds in your account to cover the payment.
It could even be a computer glitch where the payment fails to process through no fault of your own.
So what happens if you miss a car insurance payment?
What happens if I miss a car insurance payment?
If you miss a car insurance payment or a payment fails to go through and you ignore it, the consequences could be serious:
- You could be charged late or failed payment fees by your insurance provider, as well as missed payment fees from your bank if your direct debit bounces.
- Your insurance provider can cancel your car insurance. This means that you’re not insured to drive your car. It can also make it harder and more expensive to get car insurance in the future.
- Missed or late payments can stay on your credit report for up to six years. This could bring down your credit score, which can make it difficult to get a loan, credit card or mortgage.
Your provider might give you further chances to make your payment before cancelling your policy, but this isn’t guaranteed.
Remember, if your policy is cancelled, don’t drive. Driving without insurance is illegal and the penalties are serious.
Did my car insurance payment go through or not?
Although paying for car insurance online is convenient, technology can sometimes let us down.
If you’ve made your annual payment online but haven’t received a confirmation, how do you know if it’s gone through? These are our tips:
- Check the payment has left your account. You can do this by looking at your online banking or requesting a mini statement at an ATM.
- Contact your insurance provider. They’ll be able to check your account to see if a payment has been received. If the payment failed, you can fix it straight away.
Why hasn’t my car insurance payment come out of my bank account?
If this is a first direct debit payment, check that you’ve given the correct bank account details.
For your protection, some bank accounts allow you to set a daily spending limit. Check the payment hasn’t exceeded this limit.
Banks also sometimes have system failures. Check to see if there are any wider issues with your bank.
What should I do if I can’t afford the next direct debit payment for my car insurance?
If you know you’re going to miss (or you’ve missed) a direct debit payment, you should contact your insurance provider right away.
Depending on what your provider allows, you might be able to:
- Make a separate payment online. But let your bank know if you do to avoid paying twice.
- Get an extension on your payment date to when you can afford the payment.
- Spread the cost by paying in instalments.
The golden rule is to speak to your insurance provider directly and as soon as possible to see what your options are.
What happens if I can’t afford my direct debit?
If you’re paying for your car insurance monthly by direct debit and there isn’t enough money in your account to cover a payment, it will bounce. This is sometimes called a returned direct debit.
The bank will make two attempts to make the payment on the day it’s due – the first in the morning and the second at 2pm. This is known as the retry process. It gives you some time to pay the money into your account if that’s possible.
If the second attempt doesn’t work, your bank may charge you an unpaid item fee for the missed payment.
To prevent any payment problems in the first place, see if you can arrange your direct debit to go out on a suitable date (for example, straight after your salary goes into your account). You could ask your provider if they can send a text or email alert as a reminder.
If you’re having money problems, MoneyHelper can help you find free debt advice.
Also see our tips on how to get out of debt.
Where can I find cheap car insurance?
We’re here to help you find affordable car insurance. But remember, the cheapest car insurance isn’t always the best car insurance for you. Make sure you find a policy that suits your needs as well as your budget.
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Rebecca Goodman - Insurance expert
Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs. Rebecca regularly writes for national newspapers including The Independent and The Mail on Sunday on a wide-range of financial topics. She covers everything from money-saving tips and holiday advice to investigations into how energy efficient appliances can cut the cost of household bills and the impact donating money can have on those in need. Along with features in national papers, Rebecca also writes news stories for websites including Yourmoney.com and The Money Edit.