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Failed car insurance payment – the consequences

Failed car insurance payment – the consequences

Missing a payment deadline is an easy mistake to make. 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 and the payment fails to process, through no fault of your own.  

But what are the consequences if you miss a car insurance payment?

Daniel Hutson
From the Motor team
minute read
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Posted 13 JULY 2020

Did my car insurance payment go through or not?

Although paying car insurance online is convenient, technology has a nasty habit of sometimes letting us down.  

If you’ve gone through the payment process only to end up staring at a blank screen or not getting confirmation that it was successful, how do you know if the payment’s gone through? These are our tips:

  • If you have online banking you can usually check if a payment has left your account immediately in the most recent transactions section
  • Contact your insurance provider – they’ll be able to check your account to see if payment has been received
  • If payment did fail, you can rectify it straight away

What happens if I miss a direct debit car insurance payment?

If you’re paying by direct debit and there aren’t sufficient funds to cover the payment, contact your insurance provider directly or make a payment online. Let your bank know you’re doing this, or you could end up paying twice if your insurance provider retries.

It could be that your insurance provider may give you a few more days from the original payment date to make the payment. That’s why it’s essential that you speak to them directly and as soon as possible. 

What are the consequences of a missed or failed car insurance payment?

If you missed a payment or it fails to go through and you do nothing to rectify it, the consequences could be serious:

  • At the very least, you could be charged late or failed payment fees. If you default on several payments you could end up paying more in administration costs
  • Your insurance provider can cancel your policy on the grounds of non-payment. This means that your car is not insured, and you’re not insured to drive
  • Missed payments are noted and can stay on your credit report for up to six years. This can bring down your credit score, which means you could have difficulty getting a loan, credit card or mortgage in the future
  • Remember, if your policy is cancelled, whatever you do, don’t drive. It’s illegal and the penalties are high

What if I know I can’t afford the next payment?

If you can’t afford the next instalment:  

  • Contact your insurance provider as soon as you can – they may be able to arrange an alternative payment date for when you can afford it
  • Consider paying the instalment on a credit card or with an overdraft facility – but only if you know you’ll be able to pay it back and not make any money problems worse

To prevent any payment problems in the first place, see if you can arrange a direct debit or payments on a more suitable date (for example, straight after your salary goes into your account). You could also see if your provider is able to send out text or email alerts as a reminder.  

If you have debt problems, the Money Advice Service can help you find free debt advice. You can also get tips on how to take control of debt and take a debt health check.

Where can I find cheap car insurance?

We’re here to help you find affordable car insurance that suits your needs and your budget.  

And it doesn’t have to be expensive - 10% of our customers could achieve a comprehensive car insurance quote starting from £245** per year.

**10% of people could achieve a quote of £245.00 per year for their fully comprehensive car insurance based on Compare the Market data in May 2020.

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